Abstract
Compared with the social optimum, a monopolist usually sells too little. This result seemingly includes the case of a lab that licences its patented cost innovation: Katz and Shapiro (1986) find 'conditions under which [the lab] will issue fewer than the socially optimal number of licences.' However, I find instead that its incentives can be socially too high; the monopoly seller may sell too much. For example, it can be profit maximizing to sell several licences, while it is socially optimal that none is sold.
Original language | English |
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Pages (from-to) | 1578-1598 |
Number of pages | 21 |
Journal | Canadian Journal of Economics |
Volume | 42 |
Issue number | 4 |
DOIs | |
State | Published - Nov 2009 |
ASJC Scopus subject areas
- Economics and Econometrics