Licensing process innovations when losers' messages determine royalty rates

• 成果类型: Article
• 署名作者: Fan, Cuihong; Jun, Byoung Heon; Wolfstetter, Elmar G.
• 署名单位: Shanghai University of Finance & Economics; Korea University; Humboldt University of Berlin; Korea University
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2013.08.003
• 发表日期: 2013
• 页码: 388-402
• 关键词: Patents; Licensing; auctions; Royalty; INNOVATION; R&D; mechanism design

摘要

We consider a licensing mechanism for process innovations that awards a limited number of unrestricted licenses to those firms that report the highest cost reductions, combined with royalty licenses to others. Firms' messages are dual signals of their cost reductions: the message of those who win an unrestricted license signals their cost reduction to rival firms, while losers' messages influence the royalty rate set by the innovator. We explain why a sufficiently high threshold level for awarding the unrestricted license is essential to induce truth-telling, show that the innovator generally benefits from the proposed mechanism, and derive conditions for implementability by a modified second-price auction. (C) 2013 Elsevier Inc. All rights reserved.