Licensing and Technology Transfer

Pew Studies in Economics and Security, Incentives in Procurement Contracting, Jim Leitzel and Jean Tirole, Eds., Westview Press, 1993

Posted: 21 Feb 2014

See all articles by Lars Stole

Lars Stole

University of Chicago - Booth School of Business

Date Written: January 1, 1993

Abstract

Government mandated technology transfers from the developer of a product to a second source offer a potential gain of reduced information rents and procurement costs, even when such transfers are otherwise inefficient. This paper models the tradeoff between information extraction and inefficient transfers in the context of an optimally-designed procurement auction in which an incumbent supplier bids against a potential second-source firm. In the optimal auction, the incumbent firm is given stronger incentives to bid aggressively by transferring technology when the bids from the competing firms are close and the transfer is not otherwise too inefficient.

Keywords: Contract theory, Incentives

JEL Classification: C70, D82

Suggested Citation

Stole, Lars A., Licensing and Technology Transfer (January 1, 1993). Pew Studies in Economics and Security, Incentives in Procurement Contracting, Jim Leitzel and Jean Tirole, Eds., Westview Press, 1993. Available at SSRN: https://ssrn.com/abstract=2398484

Lars A. Stole (Contact Author)

University of Chicago - Booth School of Business ( email )

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