Uncertainty and licensing in a vertical structure
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Uncertainty and Licensing in a Vertical Structure. Fang-yueh Chen National Chung Cheng University Tsai-chen Shen Tatung Institute of Commerce and Technology.

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Uncertainty and licensing in a vertical structure

Uncertainty and Licensing in a Vertical Structure

Fang-yueh Chen

National Chung Cheng University

Tsai-chen Shen

Tatung Institute of Commerce and Technology

This paper is to be presented in「Corporate Governance, Foreign Entry, and Market Competition」International Conference 2011,held in National University of Kaohsiung, R.O.C.


I motivations
I. Motivations

  • Licensing in a vertical structure

  • Licensing with risk sharing

  • Endogenizing insider and outsider models

  • Licensing and vertical externality


Ii purposes
II. Purposes

  • Investigate how an input monopolist shares risks through international licensing and its consequences

  • Examine the impact of entry in the downstream market


Iii literature reviews
III. Literature reviews

  • Related to vertical structure:

    • Mukherjee (2010a), Mukerjee and Ray (2007, MS), Mukherjee and Pennings (2011, IJIO)

  • Related to threat of entry:

    • Kabiraj and Marjit (1993, JDE), Saggi (1996, RIE), Pack and Saggi (2001, JDE), Dinda and Mukherjee (2011, JPET)

  • Related to uncertainty:

    • Bousquet et al. (1998, IJIO)


Iv the basic model

Country J

Country T

Licensing

Firm A

Firm C

input market

Firm B

Country E

Figure 1: The basic model

IV. The basic model


V sequence of moves and main equations cont
V. Sequence of moves and main equations (Cont.)

  • Stage 1: Licensing game

  • Stage 2: Input market equilibrium

  • Stage 3: The uncertainty resolves

  • Stage 4: Final goods market equilibrium







Viii the extended model

Country J outsider

Country T

Licensing

Firm A

Firm C

Input Market, M1

Input Market, M2

Firm B

Firm D

Country E

Figure 4: The extended model

VIII. The extended model







Thank for your listening and comments are very welcome
Thank for your listening outsiderand comments are very welcome.


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