The Optimal Licensing Contract in a Differentiated Stackelberg Model
Joint Authors
Hong, Xianpei
Yang, Lijun
Zhang, Huaige
Zhao, Dan
Source
Issue
Vol. 2014, Issue 2014 (31 Dec. 2014), pp.1-12, 12 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2014-02-10
Country of Publication
Egypt
No. of Pages
12
Main Subjects
Medicine
Information Technology and Computer Science
Abstract EN
This paper extends the work of Wang (2002) by considering a differentiated Stackelberg model, when the leader firm is an inside innovator and licenses its new technology by three options, that is, fixed-fee licensing, royalty licensing, and two-part tariff licensing.
The main contributions and conclusions of this paper are threefold.
First of all, this paper derives a very different result from Wang (2002).
We show that, with a nondrastic innovation, royalty licensing is always better than fixed-fee licensing for the innovator; with a drastic innovation, royalty licensing is superior to fixed-fee licensing for small values of substitution coefficient d; however when d becomes closer to 1, neither fee nor royalty licensing will occur.
Secondly, this paper shows that the innovator is always better off in case of two-part tariff licensing than fixed-fee licensing no matter what the innovation size is.
Thirdly, the innovator always prefers to license its nondrastic innovation by means of a two-part tariff instead of licensing by means of a royalty; however, with a drastic innovation, the optimal licensing strategy can be either a two-part tariff or a royalty, depending upon the differentiation of the goods.
American Psychological Association (APA)
Hong, Xianpei& Yang, Lijun& Zhang, Huaige& Zhao, Dan. 2014. The Optimal Licensing Contract in a Differentiated Stackelberg Model. The Scientific World Journal،Vol. 2014, no. 2014, pp.1-12.
https://search.emarefa.net/detail/BIM-1049638
Modern Language Association (MLA)
Hong, Xianpei…[et al.]. The Optimal Licensing Contract in a Differentiated Stackelberg Model. The Scientific World Journal No. 2014 (2014), pp.1-12.
https://search.emarefa.net/detail/BIM-1049638
American Medical Association (AMA)
Hong, Xianpei& Yang, Lijun& Zhang, Huaige& Zhao, Dan. The Optimal Licensing Contract in a Differentiated Stackelberg Model. The Scientific World Journal. 2014. Vol. 2014, no. 2014, pp.1-12.
https://search.emarefa.net/detail/BIM-1049638
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-1049638