Editing License (section)

==Economic theory==
Patent licensing has been studied in formal economic models in the field of [[industrial organization]]. In particular, Katz and Shapiro (1986) have explored the optimal licensing strategy of a research lab selling to firms who are competitors on the product market.<ref>{{Cite journal|last1=Katz|first1=Michael L.|last2=Shapiro|first2=Carl|date=1986|title=How to License Intangible Property|url=https://academic.oup.com/qje/article/101/3/567/1899659|journal=The Quarterly Journal of Economics|language=en|volume=101|issue=3|pages=567–589|doi=10.2307/1885697|issn=0033-5533|jstor=1885697}}</ref> It turns out that (compared to the welfare-maximizing solution) the licensor's incentives to develop innovations may be excessive, while the licensor's incentives to disseminate the innovation are typically too low. Subsequently, the seminal work of Katz and Shapiro (1986) has been extended in several directions. For example, Bhattacharya, Glazer, and Sappington (1992) have taken into account that the firms acquiring licenses must make further investments in order to develop marketable products.<ref>{{Cite journal|last1=Bhattacharya|first1=Sudipto|last2=Glazer|first2=Jacob|last3=Sappington|first3=David E. M|date=1992|title=Licensing and the sharing of knowledge in research joint ventures|journal=Journal of Economic Theory|volume=56|issue=1|pages=43–69|doi=10.1016/0022-0531(92)90068-S|issn=0022-0531|url=https://pure.uvt.nl/portal/en/publications/licensing-and-the-sharing-of-knowledge-in-research-joint-ventures(cd5b77e5-fb89-4321-b284-e23bbcbc4238).html}}</ref> Schmitz (2002, 2007) has shown that asymmetric information due to [[adverse selection]] or [[moral hazard]] may lead the research lab to sell more licenses than it would do under complete information.<ref>{{Cite journal|last=Schmitz|first=Patrick W.|date=2002|title=On Monopolistic Licensing Strategies under Asymmetric Information|journal=Journal of Economic Theory|volume=106|issue=1|pages=177–189|doi=10.1006/jeth.2001.2863|issn=0022-0531|url=https://mpra.ub.uni-muenchen.de/12532/1/MPRA_paper_12532.pdf |archive-url=https://ghostarchive.org/archive/20221009/https://mpra.ub.uni-muenchen.de/12532/1/MPRA_paper_12532.pdf |archive-date=2022-10-09 |url-status=live}}</ref><ref>{{Cite journal|last=Schmitz|first=Patrick W.|date=2007|title=Exclusive versus non-exclusive licensing strategies and moral hazard|journal=Economics Letters|volume=97|issue=3|pages=208–214|doi=10.1016/j.econlet.2007.03.021|s2cid=154480102|issn=0165-1765}}</ref> Antelo and Sampayo (2017) have studied the optimal number of licenses in a [[Signalling (economics)|signalling]] model.<ref>{{Cite journal|last1=Antelo|first1=Manel|last2=Sampayo|first2=Antonio|date=2017|title=On the Number of Licenses with Signalling|journal=The Manchester School|language=en|volume=85|issue=6|pages=635–660|doi=10.1111/manc.12157|s2cid=156398513|issn=1467-9957|hdl=10.1111/manc.12157|hdl-access=free}}</ref>