{"title":"Technology Licensing, Network Externalities and Social Welfare in Cournot Differentiated Duopoly","authors":"Ke Yan, Leonard F. S. Wang, Longfei Gao","doi":"10.1002/mde.4528","DOIUrl":null,"url":null,"abstract":"<div>\n \n <p>The present paper establishes a horizontal differentiated-good Cournot duopoly with an inside patent-holding firm (licensor) under general network externalities to examine the superiority of fixed-fee licensing versus royalty licensing. We find that for the licensor, royalty licensing is superior to fixed-fee licensing if the network effect is weak and the degree of product differentiation is low. In addition, both consumer surplus and social welfare are higher under fixed-fee licensing in the presence of network externalities.</p>\n </div>","PeriodicalId":18186,"journal":{"name":"Managerial and Decision Economics","volume":"46 5","pages":"3244-3249"},"PeriodicalIF":2.5000,"publicationDate":"2025-03-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Managerial and Decision Economics","FirstCategoryId":"96","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1002/mde.4528","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
The present paper establishes a horizontal differentiated-good Cournot duopoly with an inside patent-holding firm (licensor) under general network externalities to examine the superiority of fixed-fee licensing versus royalty licensing. We find that for the licensor, royalty licensing is superior to fixed-fee licensing if the network effect is weak and the degree of product differentiation is low. In addition, both consumer surplus and social welfare are higher under fixed-fee licensing in the presence of network externalities.
期刊介绍:
Managerial and Decision Economics will publish articles applying economic reasoning to managerial decision-making and management strategy.Management strategy concerns practical decisions that managers face about how to compete, how to succeed, and how to organize to achieve their goals. Economic thinking and analysis provides a critical foundation for strategic decision-making across a variety of dimensions. For example, economic insights may help in determining which activities to outsource and which to perfom internally. They can help unravel questions regarding what drives performance differences among firms and what allows these differences to persist. They can contribute to an appreciation of how industries, organizations, and capabilities evolve.