We show the effects of product differentiation and product market competition on technology licensing by an outside innovator. For a certain range of product differentiation, both the innovator and the society prefer royalty licensing compared to auction (or fixed-fee), irrespective of Cournot...

We show that under a fixed-fee licensing contract if the licenser and the licensee bargain over the licensing fee, licensing decreases (increases) innovation by decreasing (increasing) the strategic (non-strategic) benefit from innovation. However, licensing increases innovation under a two-part...

Schumpeterian growth theory has operationalized Schumpeter’s notion of creative destruction by developing models based on this concept. These models shed light on several aspects of the growth process that could not be properly addressed by alternative theories. In this survey, we focus on...