Abstract
The present paper analyzes the patent licensing behavior of a Stackelberg leader of manufacturing firms with an in‐house R&D division in a differentiated product market where the firm is able to choose between fixed‐fee licensing and royalty licensing. The findings are compared with the conclusions reached on the Stackelberg competition model in a homogeneous product market, and those under Cournot competition in a differentiated product market. This paper also examines two‐part tariff licensing and its findings are compared with those of previous studies.
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