nep-ind 2018-01-01 papers

on Industrial Organization

Issue of 2018–01–01
two papers chosen by
Kwang Soo Cheong, Johns Hopkins University

Oligopoly Equilibrium with differentiated commodities: a computation of two models By Bio-Akanni ELEGBEDE
Patent licensing in the presence of a differentiated good By Jiyun Cao; Uday Bhanu Sinha

Oligopoly Equilibrium with differentiated commodities: a computation of two models

By:	Bio-Akanni ELEGBEDE (IAE DIJON - Université de Bourgogne (CREGO))
Abstract:	In this paper, we define the concept of symmetric Cournot-Walras equilibrium (SCWE thereafter) in a pure exchange economy with differentiated commodities based on Julien and Tricou (2005). We compute this concept of equilibrium to two economies where the oligopolists offer their differentiated goods on the market in order to obtain the competitive good. We obtain three main results. First, we find that, under certain conditions, SCWE-DP allocations and price converge to Walrasian ones. Second, we also find that whether the SCWE-DP is Pareto-dominated or not by Walrasian equilibrium depends on the type of economic agent (oligopolist or competitive). Third, the two economies are linked.
Keywords:	Di erentiated commodity; General equilibrium; Cournot-Walras Equilibrium
JEL:	C72 D43 D51 L13 L38
Date:	2017–12
URL:	https://d.repec.org/n?u=RePEc:dij:wpfarg:1171201

Patent licensing in the presence of a differentiated good

By:	Jiyun Cao (The School of Economics, Nankai University and Collaborative Innovation Center for China Economy, Tianjin, China); Uday Bhanu Sinha (Department of Economics, Delhi School of Economics)
Abstract:	The existing literature has considered licensing of a patented innovation either in a homogenous good industry or in a differentiated goods industry. We consider the licensing problem between two firms i.e., licensor and licensee producing the homogenous goods when there is a third firm producing a differentiated good in the market. We find that when the costs of non-innovators are not high, the optimal licensing contract depends on the degree of product differentiation and the innovator has more incentive for innovation when it is an insider than when it is an outsider of this market.
Keywords:	licensing, two-part tariff, Cournot oligopoly, homogenous and differentiated goods, incentive for innovation.
JEL:	D43 D45 L13
Date:	2017–12
URL:	https://d.repec.org/n?u=RePEc:cde:cdewps:282

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