October  2007, 3(4): 763-774. doi: 10.3934/jimo.2007.3.763

Licensing schemes in Stackelberg model under asymmetric information of product costs

1. 

School of Business Administration, North China Electric Power University, Beijing 102206, P R, China, China

2. 

Academy of Mathematics and System Sciences, Chinese Academy of Sciences, Beijing 100080, P R, China

Received  September 2006 Revised  April 2007 Published  October 2007

Based on the conclusion that have been put forward by Sougata Poddar and Uday Bhanu Sinha (2002), in "The Role of Fixed Fee and Royalty in Patent Licensing", we construct a model to analyze the behavior of the patentee when the licensee have private information about its marginal product costs before licensing. In the paper, the patentee is not considered as an independent R&D institute anymore but an insider. Moreover, we extend the model to Homogeneous Stackelberg and present the patentee's optimal linear licensing schemes in the sense of maximizing its profits under the licensing contract. It is found that the expected profit of the patentee under the separating contract is higher than any pooling contract in this model.
Citation: Qing-you Yan, Juan-bo Li, Ju-liang Zhang. Licensing schemes in Stackelberg model under asymmetric information of product costs. Journal of Industrial & Management Optimization, 2007, 3 (4) : 763-774. doi: 10.3934/jimo.2007.3.763
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