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- Publisher
- Wiley
- Copyright
- "© 2019 The RAND Corporation"
- ISSN
- 0741-6261
- eISSN
- 1756-2171
- DOI
- 10.1111/1756-2171.12266
- Publisher site
- See Article on Publisher Site
Abstract
Patent pools are commonly used to license technologies to manufacturers. Whereas previous studies focused on manufacturers active in independent markets, we analyze pools licensing to competing manufacturers, allowing for multiple licensors and nonlinear tariffs. We find that the impact of pools on welfare depends on the industry structure: whereas they are procompetitive when no manufacturer is integrated with a licensor, the presence of vertically integrated manufacturers triggers a novel trade‐off between horizontal and vertical price coordination. Specifically, pools are anticompetitive if the share of integrated firms is large, procompetitive otherwise. We then formulate information‐free policies to screen anticompetitive pools.
Journal
The Rand Journal of Economics – Wiley
Published: Mar 1, 2019