License Auctions with Royalty Contracts for (Winners and) Losers

Arbeitspapier

This paper revisits the licensing of a non-drastic process innovation by an outside innovator to a Cournot oligopoly. We propose a new mechanism that combines a restrictive license auction with royalty licensing. This mechanism is more profitable than standard license auctions, auctioning royalty contracts, fixed-fee licensing, pure royalty licensing, and two-part tariffs. The key features are that royalty contracts are auctioned and that losers of the auction are granted the option to sign a royalty contract. Remarkably, combining royalties for winners and losers makes the integer constraint concerning the number of licenses irrelevant.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SFB/TR 15 Discussion Paper ; No. 199

Classification and Topics

• Classification: Wirtschaft ; Firm Behavior: Theory ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Auctions ; Rationing; Licensing
• Subject: patents ; licensing ; auctions ; royalty ; innovation ; R&D ; mechanism design

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Giebe, Thomas ; Wolfstetter, Elmar G.
• Event: Veröffentlichung
• (who): Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
• (where): München
• (when): 2007

Further information

• DOI: doi:10.5282/ubm/epub.13353
• Handle: http://hdl.handle.net/10419/93820
• URN: urn:nbn:de:bvb:19-epub-13353-0
• Last update: 10.03.2025, 11:43 AM CET