Economics, Finance, & Quantitative Analysis
We show the impact of technology licensing on optimal patent policy. Strong patent protection that eliminates imitation may not be the equilibrium outcome in the presence of licensing. Depending on the cost of innovation, licensing may either increase or reduce the strength of the patent protection.
Mukherjee, A., & Bagchi, A. (2010). Licensing and Patent Protection. Economics Bulletin, 30(3), 2010-2016.