Final Exam: Technology Marketing 505Ulibarri, Spring, 2007Due Date: May 8, 2007 9 am.1.Conventional economic models of the patent-innovation relationship (e.g. Nordhaus, 1969), predict a ‘positive monotonic relationship’ between patent strength and innovation incentives. What are the counter-arguments to this “old-school view?” 2. Use two “Cash-flow” diagrams to illustrate a “win-win” relationship between a technology patent holder (firm A) and a small firm wishing to innovate a product upon obtaining a license from A. Assume this game relates to problem 3. Firm BInvest in R&DDon’t InvestFirm AInvest in R&D2,2-3,5Don’t Invest5,-30,03.In the absence of an enforceable patent-license process what would be the Nash Solution to this game? Is it cooperative or no-cooperative? Suppose there is a possibility to make patent licensing a reality between A and B. What would be the Nash solution to the game? Is it cooperative or non-cooperative?4.Comment on the following argument concerning firm-size and the chances of
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