Universidad de Oviedo: Ediciones de la Universidad de Oviedo
Abstract
We consider the issue of optimal licensing from the viewpoint of an external public licensor
maximizing social welfare. Our principal findings are as follows. Fee licensing is always at
least as good as royalty licensing for the public licensor. For small innovations, there exists a
subgame perfect equilibrium outcome in which the public licensor licenses his patented
technology to only an efficient (low-cost) firm maximizing its profit