scholarly journals On the Sustainability of Technology Licensing Under Asymmetric Information Game

2019 ◽  
Vol 11 (24) ◽  
pp. 6959
Author(s):  
Chien-Shu Tsai ◽  
Ting-Chung Tsai ◽  
Po-Sheng Ko ◽  
Chien-Hui Lee ◽  
Jen-Yao Lee ◽  
...  
Keyword(s):  
Asymmetric Information ◽  
Cost Saving ◽  
Past Research ◽  
Technology Licensing ◽  
Market Size ◽  
Optimum Strategy ◽  
Fixed Fee

Past research indicates that a licensor tends to adopt the fixed fee, in order to obtain higher profit rather than secure royalty when he participates in zero production in the market. This study instead finds that the patentee’s optimum strategy may vary. In addition to the fixed-fee strategy, royalty or mixed licensing, or fixed fee plus royalty may be potential choices for the patentee as well which is depend on the market scale, incidence of market scale, and magnitude of cost-saving. The patentee may choose to only authorize a type of high market size based on self-interested motives. The technology licensing market is not sustainable.

scholarly journals Technology Licensing between Rival Firms in Presence of Asymmetric Information

2017 ◽  
Vol 17 (1) ◽  
Author(s):  
Neelanjan Sen ◽  
Sukanta Bhattacharya
Keyword(s):  
Asymmetric Information ◽  
Low Cost ◽  
Technology Licensing ◽  
Cournot Duopoly ◽  
Cost Difference ◽  
Cost Information ◽  
Rival Firms ◽  
The Cost ◽  
Duopoly Market ◽  
Fixed Fee

AbstractThis paper investigates the possibility of licensing between rival firms in a Cournot duopoly market. Unlike Heywood, Li, and Ye (2014. “Per Unit vs. Ad Valorem Royalties under Asymmetric Information.” International Journal of Industrial Organization 37:38–46), the cost information of the licensee is private in the pre-licensing stage. If inspection of the licensee’s technology is not possible by the licensor i) technology is never transferred from the low-cost firm (licensor) to the high-cost firm (licensee) via fixed-fee and ii) in the case of royalty licensing technology will be transferred only if the cost difference between the firms is sufficiently high. Moreover, under fixed-fee and royalty licensing, the licensee will always allow the licensor to inspect its technology, if inspection is possible. If inspection is undertaken by the licensor, technology will be transferred i) if the cost difference is low via fixed fee and ii) always via royalty.

scholarly journals A Principal-Agent Explanation for Technology Transfer

1970 ◽  
Vol 6 (2) ◽  
pp. 26-44
Author(s):  
Beryl Zi-Lin Kuo ◽  
Chien-Hsin Lin
Keyword(s):  
Technology Transfer ◽  
Asymmetric Information ◽  
Moral Hazard ◽  
Technology Licensing ◽  
Principal Agent ◽  
Informal Governance ◽  
Goal Alignment ◽  
Royalty Payment ◽  
Negatively Associated ◽  
Fixed Fee

Technology licensing and transfer is subject to problems of asymmetric information including moral hazard. This study explores the effects of informal governance, knowledge tacitness, and organizational receptivity on the preference of variable royalty scheme in the context of technology licensing. Drawing on the classic principalagent model, we assume that the variable royalty scheme is a process-based contract where the licensee is the principal and the licensor is the agent. The results show that informal governance facilitating goal alignment is positively associated with the variable royalty scheme (i.e. the process-based contract). Organizational receptivity promotes the legitimacy to imposing routines, evaluating the technology, and forming expectation, and is positively associated with the variable royalty scheme. Knowledge tacitness is negatively associated with the variable royalty payment, which implies less transfer programmability moves payment from variable royalties to a fixed fee. Our arguments are significantly different from classic principal-agent relationship that does not involve the dimension of licensee transfer and monitoring capacity

LICENSING BY OUTSIDE INNOVATOR IN HOTELLING MODEL REVISITED

2021 ◽  
pp. 2150041
Author(s):  
YUANZHU LU ◽  
FULAN WU
Keyword(s):  
Technology Licensing ◽  
Economic Modelling ◽  
Hotelling Model ◽  
Royalty Rates ◽  
Optimal Technology ◽  
The Cost ◽  
Cost Differentials ◽  
Fixed Fee

This paper extends Banerjee and Poddar [Banerjee, S and S Poddar (2019). ‘To sell or not to sell’: Licensing versus selling by an outside innovator. Economic Modelling, 76, 293–304] by lifting the cap on per unit royalty rates in the cases of royalty licensing and two-part tariff licensing. We reconsider the optimal technology licensing contract by an outside innovator facing two heterogeneous licensees in a standard Hotelling framework. Our findings show that the optimal licensing policy could be fixed fee to the efficient firm, or two-part tariff to both firms (pure royalty to both firms), or two-part tariff to the efficient firm, depending upon the cost differentials between the firms and the size of innovation.

scholarly journals Welfare Consequences of Information Aggregation and Optimal Market Size

2017 ◽  
Vol 9 (4) ◽  
pp. 303-323 ◽  
Author(s):  
Kei Kawakami
Keyword(s):  
Asymmetric Information ◽  
Risk Aversion ◽  
Risk Sharing ◽  
Information Aggregation ◽  
Market Size ◽  
Positive Externality ◽  
Trading Model ◽  
Welfare Implications ◽  
The Right

We analyze the welfare implications of information aggregation in a trading model where traders have both idiosyncratic endowment risk and asymmetric information about security payoffs. The optimal market size balances two forces: (i) the risk-sharing role of markets, which creates a positive externality amongst traders, against (ii) the information-aggregation role of prices, which leads to prices that are more correlated with security payoffs, thereby undermining the hedging function of markets. Our analysis indicates that a market with infinitely many traders may not be the right welfare benchmark in the presence of risk aversion and information aggregation. (JEL D43, D62, D82, D83)

scholarly journals Attracting the Right Crowd under Asymmetric Information: A Game Theory Application to Rewards-Based Crowdfunding

Mathematics ◽  
2021 ◽  
Vol 9 (21) ◽  
pp. 2757
Author(s):  
Francisca Jiménez-Jiménez ◽  
M. Virtudes Alba-Fernández ◽  
Cristina Martínez-Gómez
Keyword(s):  
Game Theory ◽  
Asymmetric Information ◽  
Process Analysis ◽  
Market Size ◽  
Positive Effects ◽  
The Social ◽  
Theory Application ◽  
The Right ◽  
Conditional Process Analysis ◽  
The Relationship

In this paper, we investigate rewards-based crowdfunding as an innovative financing form for startups and firms. Based on game-theory models under asymmetric information, we test research hypotheses about the positive effects of two main campaign features: funding target and number of rewards. Furthermore, we examine how and when these characteristics are effective in attracting crowdfunders, by signaling high-quality projects (target) and by pricing according to backers’ preferences (rewards). Conditional process analysis is applied to a dataset of 1613 projects launched on the Spanish platform Verkami from 2015 to 2018. As expected, our study shows that market size is positively influenced by the target and the number of rewards, separately. Further analysis gives some interesting findings. Firstly, we find significant and positive mediating roles of social networks (in the relationship between target and market size) and of backers’ preferences (between rewards and market size). Secondly, the main orientation of a campaign, commercial or social, is relevant to explain previous relationships. While high funding targets are more effective in commercial projects, a high number of rewards is more effective in the social projects. This research provides new insights into the design of optimal crowdfunding, with theoretical and empirical implications.

scholarly journals Technology Licensing Strategy for Network Product in a Service Industry

2015 ◽  
Vol 2015 ◽  
pp. 1-17 ◽  
Author(s):  
Xianpei Hong ◽  
Dan Zhao ◽  
Haiqing Hu ◽  
Shuang Song
Keyword(s):  
Product Differentiation ◽  
Service Provider ◽  
Optimal Strategy ◽  
Network Effects ◽  
Technology Innovation ◽  
Service Industry ◽  
Service Providers ◽  
Technology Licensing ◽  
Significant Attention ◽  
Fixed Fee

Technology licensing has gained significant attention in literature and practice as a rapid and effective way to improve firm’s capability of technology innovation. In this paper, we investigate a duopolistic service provider competition market, where service providers develop and sell a kind of network product. In this setting, we analyze the innovating service provider’s four licensing strategies: no licensing, fixed fee licensing, royalty licensing, and two-part tariff licensing. The literature suggests that when the network products can be completely substituted, two-part tariff licensing is the optimal strategy of the innovating service provider. We find that when the network products cannot be completely substituted, two-part tariff licensing is not always optimal. The degree of the product differentiation, the intensity of the network effects, and the R&D cost of the potential licensee play a key role in determining the innovating service provider’s optimal licensing strategies.

Technology Licensing in a Network Product Market: Fixed-Fee versus Royalty Licensing

2018 ◽  
Vol 94 (305) ◽  
pp. 168-185 ◽  
Author(s):  
Huaige Zhang ◽  
Xuejun Wang ◽  
Xianpei Hong ◽  
Qiang Steven Lu
Keyword(s):  
Product Market ◽  
Technology Licensing ◽  
Fixed Fee
Sign in / Sign up

Export Citation Format

Share Document