More licensed technologies may make it worse: a welfare analysis of licensing vertically two-tier foreign technologies

Ku Chu Tsao, Jin Li Hu, Hong Hwang, Yan Shu Lin*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

This research analyzes the impacts of acquiring vertically two-tier cost-saving foreign technologies through licensing on the home economy’s industry profit, consumer surplus, and social welfare. It is found that upstream (downstream) licensing only leads to higher social welfare than the two-tier licensing if the downstream innovation size is small (large) — that is, acquiring more licensed foreign technologies at different tiers in vertically related markets may worsen the domestic welfare. The above results still hold in leader–follower competition under the two-tier licensing regime and even for the case where this two-tier cost-saving technology is present within the home economy itself.

Original languageEnglish
Pages (from-to)71-88
Number of pages18
JournalJournal of Economics/ Zeitschrift fur Nationalokonomie
Volume139
Issue number1
DOIs
StatePublished - Jun 2023

Keywords

  • F13
  • L22
  • L24
  • Licensing
  • O3
  • Two tiers
  • Two-part tariff
  • Vertically-related markets
  • Welfare

Fingerprint

Dive into the research topics of 'More licensed technologies may make it worse: a welfare analysis of licensing vertically two-tier foreign technologies'. Together they form a unique fingerprint.

Cite this