Econ 483_Lecture 16_Cumulative innovation

C umulative innovation licensing licensing ex post

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Unformatted text preview: ology, Evangelia Chalioti c A ll rights reserved. C umulative innovation Licensing Licensing Ex-post reasons to license: To produce proprietary products e¢ ciently (welfare enhancement) To let others use the IP as inputs to innovations (research tools) To resolve blocking rights To enable development of complementary inventions Lecture 16: Cumulative innovation Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. C umulative innovation Licensing - How can licensing increase the e¢ ciency of production? - Which are the terms of license that the proprietor will choose? - How much can she pro…t from licensing? Lecture 16: Cumulative innovation Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. C umulative innovation Licensing Licensing The instruments of a license: Royalties: based on units of a proprietary good sold or some other measure of use It is used by the licensor to control the market price, since it adds to the licensee’ marginal cost. s Fixed fees: per unit time (not linked to sales) It is used to pro…t sharing. Lecture 16: Cumulative innovation Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. C umulative innovation Licensing Exercise See "problem_licensing" on compass2g Lecture 16: Cumulative innovation Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. C umulative innovation Licensing Required readings Scotchmer, "Innovation & incentives", Chapter 5, p. 127-135; Chapter 6, Subsection 6.2 Lecture 16: Cumulative innovation Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved....
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This note was uploaded on 03/16/2014 for the course ECON 483 taught by Professor Staff during the Spring '08 term at University of Illinois, Urbana Champaign.

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