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Licensing in the Theory of Cooperative R&D
Abstract
The literature on cooperative R&D did not pay much attention to knowledge sharing ex-post innovation through technology licensing, which is a common phenomenon in many industries. The author shows how licensing ex-post R&D affects the incentive for cooperative R&D and social welfare by affecting R&D investment and the probability of success in R&D. Licensing increases both the possibility of non-cooperative R&D and social welfare.
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