Abstract | ||
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We examine a firm that can license its production technology to a rival when firms are heterogeneous in production costs. We show that a complete technology transfer from one firm to another always increases joint profit under weakly concave demand when at least three firms remain in the industry. A jointly profitable transfer may reduce social welfare, although a jointly profitable transfer from the most efficient firm always increases welfare. We also consider two auction games under complete information: a standard first-price auction and a menu auction by Bernheim and Whinston (1986). With natural refinement of equilibria, we show that the resulting licensees are ordered by degree of efficiency: menu auction, simple auction, and joint-profit-maximizing licensees, in (weakly) descending order. |
Year | DOI | Venue |
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2013 | 10.1016/j.geb.2013.07.013 | Games and Economic Behavior |
Keywords | DocType | Volume |
D4,L24,L4 | Journal | 82 |
ISSN | Citations | PageRank |
0899-8256 | 1 | 0.51 |
References | Authors | |
4 | 3 |
Name | Order | Citations | PageRank |
---|---|---|---|
Anthony Creane | 1 | 4 | 1.30 |
Chiu Yu Ko | 2 | 1 | 0.85 |
Hideo Konishi | 3 | 126 | 35.99 |