Technology transfer in mixed oligopolies: The role of cooperatives

Abstract

This paper develops a sequential game-theoretic model of technology licensing with heterogeneous firms and consumers in a mixed oligopoly to systematically analyze the optimal licensing decision of the cooperative and the market and welfare impacts of cooperative involvement in the licensing of cost-reducing process innovations. Analytical results show that the organizational form does matter in technology licensing; cooperative behavior differs from that of its investor-owned counterparts yielding significantly different equilibrium outcomes in mixed oligopolies where the cooperative is the licensor of the process innovation involved. While our analysis focuses on cost-reducing process innovations, our results are more general and hold also for quality-enhancing product innovations.