arbiter
JournalsAccount

Licensing a capacity-increasing innovation§

Stefano Colombo & Siyu Ma

Mathematical Social Sciences2026https://doi.org/10.1016/j.mathsocsci.2026.102513article
AJG 2ABDC A
Weight
0.50

Abstract

• We explore optimal licensing strategies for a capacity-increasing innovation. • We consider a Cournot duopoly with firms having asymmetric capacity constraints. • We consider both an outside innovator and an inside innovator. • We consider pre-set fees, auctions, per-unit royalties, and two-part tariffs. The paper explores optimal licensing strategies for a capacity-increasing innovation in a Cournot duopoly with firms having asymmetric capacity constraints. When the innovation is invented by an outside innovator, the choice of licensing scheme determines which firm gets the technology. In an auction, the firm with a higher initial capacity wins the license. In a unit royalty scheme, if the initial capacity difference is large, the firm with a lower initial capacity gets it; otherwise, both firms get the license. Comparing different licensing schemes, including pre-set fees, auctions, per-unit royalties and two-part tariffs, the optimal choice for the innovator is to auction one exclusive license. However, when the innovation emerges from within the duopoly, it is used solely by the incumbent innovator without being licensed to the competitor.

Open via your library →

Cite this paper

https://doi.org/https://doi.org/10.1016/j.mathsocsci.2026.102513

Or copy a formatted citation

@article{stefano2026,
  title        = {{Licensing a capacity-increasing innovation§}},
  author       = {Stefano Colombo & Siyu Ma},
  journal      = {Mathematical Social Sciences},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1016/j.mathsocsci.2026.102513},
}

Paste directly into BibTeX, Zotero, or your reference manager.

Flag this paper

Licensing a capacity-increasing innovation§

Flags are reviewed by the Arbiter methodology team within 5 business days.

Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.