Patent licensing in a model of spatial price discrimination

Heywood, John and Ye, Guangliang (2011) Patent licensing in a model of spatial price discrimination. Papers in Regional Science, 90 (3). pp. 589-602. ISSN 1056-8190

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Abstract

This paper demonstrates that it can be optimal for innovators that also produce to license via a fixed fee rather than a royalty in a model of spatial price discrimination. This reversal of the typical result emerges when reduced willingness to pay by consumers limits the competitive location advantage associated with differential production costs. Thus, in our duopoly model the innovator can earn more via the fixed fee than either no licensing or licensing by royalty, even though this requires accepting symmetric locations and the associated equality in production costs.

Item Type: Journal Article
Journal or Publication Title: Papers in Regional Science
Uncontrolled Keywords: /dk/atira/pure/subjectarea/asjc/3300/3305
Subjects:
Departments: Lancaster University Management School > Economics
ID Code: 64903
Deposited By: ep_importer_pure
Deposited On: 04 Jun 2013 14:56
Refereed?: Yes
Published?: Published
Last Modified: 01 Jan 2020 08:30
URI: https://eprints.lancs.ac.uk/id/eprint/64903

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