Examines the optimal licensing agreement between thepatent holder of a cost-cutting technology and firms that have various uses forthe innovation. This is accomplished through the development of a model ofpatent licensing that integrates two important features largely unexplored inthe...

There is considerable controversy about the relative merits of the apportionment rule (which results in per-unit royalties) and the entire market value rule (which results in ad-valorem royalties) as ways to determine the scope of the royalty base in licensing negotiations and disputes. This...

This paper proposes a framework to analyze holdout in patent licensing negotiations. We show that when the validity of a patent is probabilistic, a potentialdownstream user has incentives to shun to pay the price offered by a patent holderto license the technology and risk being brought to...

This paper analyzes the interplay between firms' self-regulation (often denoted as corporate social responsibility) as opposed to the formal regulation of a negative externality. Firms respond to increasing activism in the market (conscious consumers that take into account the external effects...

At which stage in the production chain should patent licensing takes place? In this paper we show that under realistic circumstances a patent holder would be better off by licensing downstream. This occurs when the licensing revenue can depend on the downstream value of the product either...

This paper presents a model of cumulative innovation in which firms are heterogeneous in their research ability. We study the optimal reward policy when the quality of the ideas and their subsequent development effort are private information. Monopoly power is a scarce resource to be allocated...