On Monopolistic Licensing Strategies Under Asymmetric Information

  title={On Monopolistic Licensing Strategies Under Asymmetric Information},
  author={Patrick W. Schmitz},
  journal={Microeconomic Theory eJournal},
  • P. Schmitz
  • Published 1 September 2002
  • Economics
  • Microeconomic Theory eJournal
Consider a research lab that owns a patent on a new technology but cannot develop a marketable final product based on the new technology. There are two downstream firms that might successfully develop the new product. If the downstream firms' benefits from being the sole supplier of the new product are private information, the research lab will sometimes sell two licences, even though under complete information it would have sold one exclusive licence. This is in contrast to the standard result… 

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