Selling patent rights and the incentive to innovate

Yair Tauman*, Ming Hung Weng

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


We show that an outside innovator has a higher incentive to innovate than an incumbent innovator, by auctioning off his patent rights exclusively to an incumbent firm. For significant innovations this is also superior to selling licenses directly.

Original languageEnglish
Pages (from-to)241-244
Number of pages4
JournalEconomics Letters
Issue number3
StatePublished - Mar 2012
Externally publishedYes


  • Cournot oligopoly
  • Incentive to innovate
  • Patent licensing
  • Patent rights
  • Process innovation


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