The Shapley value of a patent licensing game: The Asymptotic equivalence to non-cooperative results

Yair Tauman, Naoki Watanabe

Research output: Contribution to journalArticle

28 Citations (Scopus)

Abstract

We consider a game in characteristic form played by firms and an outside patent holder of a cost-reducing innovation. The worth of a coalition of players is the total Cournot profit the coalition can guarantee to obtain when it operates an optimal number of its firms while the complement operates any number of its firms as to minimize the profit of the coalition. Only firms in a coalition with the patent holder are allowed to use the efficient technology. We prove that when the number of firms is large, the Shapley value of the patent holder approximates the payoff he obtains in the non-cooperative auction game traditionally studied in the literature.

Original languageEnglish
Pages (from-to)135-149
Number of pages15
JournalEconomic Theory
Volume30
Issue number1
DOIs
Publication statusPublished - 2007 Jan 1
Externally publishedYes

Keywords

  • Max-min and min-max
  • Patent licensing
  • Shapley value

ASJC Scopus subject areas

  • Economics and Econometrics

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