Patent Licensing and Entry Deterrence
The Role of Low Royalties
Bibliographic Data
| ID | 9722699 |
|---|---|
| Authors | Anne Duchêne (IPAG Business School Paris and Drexel University Philadelphia), Debapriya Sen (0000-0002-1950-7915, Ryerson University Toronto), Konstantinos Serfes (0000-0002-0449-6774, Drexel University Philadelphia) |
| Year | 2015 |
| Volume | 82 |
| Issue | s1 |
| Pages | 1324-1348 |
| Publication date | 2015-12-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Economica (JOURNAL) |
| Journal identifiers | ISSN: 0013-0427 • E-ISSN: 1468-0335 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/ecca.12141 |
| OpenAlex | W3123596990 |
| Language | EN |
| References cited | 37 |
We study how an incumbent patent holder can use licensing strategically to reduce the threat of further entry, through a low royalty. This licensing strategy deters entry by making the terms of future licensing agreements less favourable to potential entrants. Strategic licensing induces a trade‐off between a more concentrated market and a lower price. When this strategy is profitable for the patent holder, it is welfare enhancing if and only if the entry cost is high, or the efficiency edge of the technology is significant. Our analysis yields new policy implications (e.g. royalty floor) with respect to strategic licensing
Barriers to entry · Business · Commerce · Consumer welfare · Deterrence theory · Economics · Industrial organization · Market economy · Market structure · Welfare · Firm Innovation and Growth · Innovation Policy and RD · Intellectual Property and Patents
Competition and Innovation
Protecting Their Intellectual Assets
Economic Welfare and the Allocation of Resources for Invention
The Effects of Entry on Incumbent Innovation and Productivity
The Economic Impact of the Patent System
The Independent Invention Defence in Intellectual Property
The Role of Investment in Entry-Deterrence
| Citation velocity | historical |
|---|---|
| Highly cited | No |