Fixed-fee liscensing of innovations and collusion
The Journal of Industrial Economics
Unlike other types of licensing agreements such as those with output restrictions market division clauses, or output royalties, licensing contracts with only a fixed-fee have been perceived as having no anticompetitive consequences. This paper illustrates that fixed-fee licensing may facilitate collusion by enhancing the lecensee's ability to credibly punish deviations from the collusive outcome on the part of the licenser. Antitrust implications of the result and potential ways of detecting collusion-motivated licenses are discussed.
Copyright © 1996 Blackwell Publishing.Access to external full text or publisher's version may require subscription.
Lin, P. (1996). Fixed-fee liscensing of innovations and collusion. The Journal of Industrial Economics, 44(4), 443-449. doi: 10.2307/2950525