Per-unit royalty and fixed-fee licensing in a differentiated Stackelberg model

Ferreira, Flávio; Bode, Oana R.

http://hdl.handle.net/10400.22/6991

Use this identifier to reference this record.

Name:	Description:	Size:	Format:
COM_FlavioFerreira_2012_1.pdf		226.17 KB	Adobe PDF	Download

Send Feedback

Authors

Ferreira, Flávio

Bode, Oana R.

Abstract(s)

In the present paper we consider a differentiated Stackelberg model, when the leader firm engages in an R&D process that gives an endogenous cost-reducing innovation. The aim is to study the licensing of the cost-reduction by a per-unit royalty and a fixed-fee. We analyse the implications of these types of licensing contracts over the R&D effort, the profits of the firms, the consumer surplus and the social welfare. By using comparative static analysis, we conclude that the degree of the differentiation of the goods plays an important role in the results.