nep-ipr 2021-02-01 papers

on Intellectual Property Rights

Issue of 2021–02–01
one paper chosen by
Giovanni Battista Ramello, Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

Per Unit and Ad Valorem Royalties in a Patent Licensing Game By Marta Montinaro; Rupayan Pal; Marcella Scrimitore

Per Unit and Ad Valorem Royalties in a Patent Licensing Game

By:	Marta Montinaro (University of Salento); Rupayan Pal (Indira Gandhi Institute of Development Research (IGIDR)); Marcella Scrimitore (University of Salento)
Abstract:	In a context of product innovation, we study two-part tariff licensing between a patentee and a potential rival which compete in a differentiated product market characterized by network externalities. The latter are shown to crucially affect the relative profitability of Cournot vs. Bertrand when a per unit royalty is applied. By contrast, we find that Cournot yields higher profits than Bertrand under ad valorem royalties, regardless of the strength of network effects.
Keywords:	Licensing, Product Innovation, Bertrand, Cournot, Network Effects
JEL:	L13 L20 D43
Date:	2020–10
URL:	https://d.repec.org/n?u=RePEc:fem:femwpa:2020.14

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