Optimal license fees for a new product
type: Item
instance of: scholarly article
title: Optimal license fees for a new product
zbMATH Open document ID: 0644.90009
DOI: 10.1016/0165-4896(88)90006-6
author: Morton I. Kamien
author: Yair Tauman
author: Israel Zang
published in: Mathematical Social Sciences
publication date: 1988-01-01T00:00:00Z
full work available at URL: 665.pdf
review text: We compare how much profit an inventor of a patented new `superior' product can realize by licensing its manufacture, for a fixed fee, to an oligopolistic industry producing an `inferior' substitute. Our analysis is conducted in terms of a three stage noncooperative game involving \(n+1\) players: the inventor, acting as Stackelberg leader, and the n firms. Analysis of subgame perfect equilibria in pure strategies of this game disclose the circumstances under which an inventor's optimal behavior ultimately leads to production of both products and when it follows for the production of the `superior' product only. An extreme case of the latter possibility, namely when the `superior' is produced by a monopolist, is characterized also.
Mathematics Subject Classification ID: 91B24
Mathematics Subject Classification ID: 91A40
Mathematics Subject Classification ID: 91A10
zbMATH DE Number: 4051295
zbMATH Keywords: superior product
zbMATH Keywords: product innovation
zbMATH Keywords: inventor
zbMATH Keywords: oligopolistic industry
zbMATH Keywords: three stage noncooperative game
zbMATH Keywords: Stackelberg leader
zbMATH Keywords: subgame perfect equilibria
zbMATH Keywords: optimal behavior
zbMATH Keywords: monopolist
MaRDI profile type: Publication
OpenAlex ID: W2027960099
cites work: Q5588318
cites work: Optimal capital accumulation and durable goods production
description: scientific article; zbMATH DE number 4051295