A cross-licensing system discourages R&D investments in completely complementary technologies.

We consider the R&D investments competition of the duopolistic firms in completely complementarty technologies. By "completely complementary technologies" ,we mea that each firm cannot produce the goods without both of the technologies. We derive the investments competiton equilibria in R&D of the two completely complementary technologies with and without the cross-licensing system. By comparing the R&D incestment levels in the two equilibria, we show that the crosslicensing system discourages the R&D investments when the duopolistic firms produce goods by using the two completely complementary technologies

Licensing (cross-licensing) system and R&D investments in a weakly complementary technologies economy

We consider the R&D investments competition of the two duopolistic firms in a weakly complementary technologies economy. By “the weakly complementary technologies”, we mean that each firm can produce goods without both of the two technologies but it incurs more redundant costs than that in the case each or both of the technologies may be available for it. By “the strongly complementary technologies,” we mean that the firm cannot produce the goods at all without the use of both of them. We derive the investments competition equilibria in R&D of the two weakly complementary technologies with and without the (cross-) licensing system. By comparing of the R&D investment levels in the two equilibria, we show that the (cross-) licensing system promotes the R&D investments when the duopolistic firms can produce goods by using of the two weakly complementary technologies