The purpose of the present paper is to examine how competition among technology holders in both product market and technology market affects their incentives to issue fixed-fee licenses to potential entrants. Two separate cases in a differentiated Cournot structure, a monopolist patentee and multiple symmetric patentees, are considered on the basis of whether or not the patentee faces competition pressure of technology market. And the determination of the optimal license number of pat-entee(s) is solved explicitly. The results show that no licensing is the preferred option of each of multiple symmetric patentees. However, for a monopolist patentee, its licensing incentive is increasing in both the number of incumbent competitors and the substitution coefficient of product.
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