American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Screening for Good Patent Pools through Price Caps on Individual Licenses
American Economic Journal: Microeconomics
vol. 8,
no. 3, August 2016
(pp. 64–94)
Abstract
Patent pools reduce prices when selling complementary inputs to technologies, but can also effectively cartelize markets when involving substitutes. Independent licensing, by reintroducing competition, ensures that only good pools form when there are two patent holders involved. For larger pools, independent licensing needs to be complemented by other policy tools. We propose to constrain the royalties for the patents individually licensed outside the pool with price caps replicating the pool's sharing rule. This information-free screening device works with asymmetries, even when licensors try to stabilize pools by readjusting the sharing rule in a way that may not reflect contributions.Citation
Boutin, Aleksandra. 2016. "Screening for Good Patent Pools through Price Caps on Individual Licenses." American Economic Journal: Microeconomics, 8 (3): 64–94. DOI: 10.1257/mic.20140237Additional Materials
JEL Classification
- D21 Firm Behavior: Theory
- D45 Rationing; Licensing
- K11 Property Law
- L12 Monopoly; Monopolization Strategies
- L24 Contracting Out; Joint Ventures; Technology Licensing
- O31 Innovation and Invention: Processes and Incentives
- O34 Intellectual Property and Intellectual Capital
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