Exclusive Versus Non-Exclusive Licensing Strategies and Moral Hazard

@article{Schmitz2007ExclusiveVN,
  title={Exclusive Versus Non-Exclusive Licensing Strategies and Moral Hazard},
  author={Patrick W. Schmitz},
  journal={IO: Productivity},
  year={2007}
}
An upstream firm can license its innovation to downstream firms that have to exert further development effort. There are situations in which more licenses are sold if effort is a hidden action. Moral hazard may thus increase the probability that the product will be developed. 
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TLDR
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Abstract We show the effect of patent protection on R&D investment in the presence of ‘inventing around’ (or ‘non-infringing’ imitation) and technology licensing. Though the ‘tournament effect’ underExpand
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