This paper analyzes the welfare implications of abatement technology licensing under taxation and emission trading schemes. We demonstrate that a firm with a better abatement technology optimally sells a per-unit royalty license to a competitor under both schemes but offers a higher royalty rate...

We examine the welfare implication of input price discrimination in the vertically related market wherein two downstream firms purchase a cost-saving technology from an outside innovator and input factors from a monopolistic supplier to produce final goods. We show that input price...