HOLDUP AND LICENSING OF CUMULATIVE INNOVATIONS WITH PRIVATE INFORMATION

James E. Bessen

Boston University School of Law Working Paper 04-11

Abstract

When innovation is cumulative, early patentees can hold up later innovators. Under complete information, licensing before R&D avoids holdup. But when development costs are private information, ex ante licensing may only occur in regimes with sub-optimal patent policy.

 

An earlier version of this paper may be found below, click to download the document. The final published version of this paper may be found at Economics Letters, Vol. 82, No. 3, pp. 321-26, 2004

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James Bessen Contact Information:

jbessen@researchoninnovation.org

Boston University School of Law
765 Commonwealth Ave
Boston, MA 02215
USA
(617) 353-5817

SSRN Site:

http://www.ssrn.com/abstract_id=517023

Presentation and Publication Information:

Economics Letters, Vol. 82, No. 3, pp. 321-26, 2004

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