2019 | Llanes, G.

Review of Industrial Organization

IF 2017 : 0,767 |

AI 2017 : 0,425

Ex-ante agreements and FRAND commitments in a repeated game of standard-setting organizations

I study licensing and technology choice in standard setting. I find that there may be inefficient adoption of technologies, even when firms commit to a maximum royalty or price cap for the use of their patents. When firms interact repeatedly to develop standards, a commitment to set fair, reasonable and non-discriminatory (FRAND) royalty fees may lead to more efficient technologies and higher surplus for all parties. This result can explain why standard-setting organizations favor FRAND commitments over more structured licensing commitments—such as price caps—and why there are been relatively few cases of hold-up in practice, even though such opportunistic behavior has been a primary cause of concern for innovation economists.

 

Publicado en: Review of Industrial Organization

Artículo: ISI , Estrategia