Holdup and Licensing of Cumulative Innovations with Private Information
Posted: 16 Mar 2004
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.
Keywords: Patents, licensing, innovation, intellectual property
JEL Classification: K3, L5, O3
Suggested Citation: Suggested Citation