Cooperation strategy of technology licensing based on evolutionary game

Abstract

This study analyzes the issue of technology-licensing cooperation between a firm with production patent technology and a firm with inferior production technology, and obtains the evolution trend of the technology-licensing deal and cooperation strategy under fixed-fee licensing and royalty licensing situation. We find that the probability of successful cooperation between the two firms increases when fixed technology-license fees and cost savings from technology licensing increase simultaneously, and change of fixed technology license fees and cost savings affects the willingness to cooperate of the firm with inferior production technology, and not the firm with production patent technology. Furthermore, modest royalty fees promote successful cooperation. In both licensing situations, for the firm with production patent technology, an increase in the market share of its products or non-licensing resource sharing cost-saving value reduces the cooperation probability. Meanwhile, for the firm with inferior production technology, an increase in the market share of its products promotes successful cooperation in the royalty licensing case, but requires conditions for fixed technology-licensing fees and cost savings lower than a certain value in the fixed-fee licensing case.