Theoretical Analysis on Licensing Strategy

摘要

This paper extends the standard model of Arora and Fosfuri [1] to a more complicated framework of the license payment mechanism and the intellectual property protection. The extended model of this paper contributes the following results: (1)The more differentiated the final good is, the less the firms license. (2) The more (less) differentiated the firms good is, the more the firms prefer royalty licensing (fixed-fee licensing). (3) The stricter the intellectual property protection is, the more the firms license. (4) The lower the transaction costs of licensing or the higher the licensing royalty is, the more the firms license.