Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Tuesday, November 12, 2013

Patent Licensing in Spatial Models

Yuanzhu Lu (China Economics and Management Academy, Central University of Finance and Economics, China) and Sougata Poddar (Department of Economics, Faculty of Business and Law, Auckland University of Technology) examine Patent Licensing in Spatial Models.

ABSTRACT:  We show that a two-part tariff licensing contract is always optimal to the insider patentee in spatial models irrespective of the size of the innovation or any pre-innovation cost asymmetries. The result provides a simple justification of the prevalence of two-part tariff licensing contracts in industries.

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