CHARITY AUCTIONS*

In a charity auction the public‐goods nature of auction revenue affects bidding incentives. We compare equilibrium bidding and revenue in first‐price, second‐price, and all‐pay charity auctions. Bidding revenue typically varies by selling format. First‐price auctions are less lucrative than second‐price and all‐pay auctions, and with sufficiently many bidders the all‐pay auction has the highest bidding revenue. However, revenue equivalence applies when the auctioneer can set a reserve price and fees plus threaten to cancel the auction. If the auctioneer cannot threaten cancellation, a reserve and bidding fee can augment revenue but again revenue varies by auction format     

Equivalence between fixed fee and ad valorem profit royalty

For an outside innovator with a finite number of buyers of the innovation, this paper compares two licensing schemes: (i) fixed fee, in which a licensee pays a fee to the innovator and (ii) ad valorem profit royalty, in which a licensee leaves a fraction of its profit with the innovator. We show these two schemes are equivalent in that for any number of licenses the innovator puts for sale, these two schemes give the same licensing revenue. We obtain this equivalence result in a general model with minimal structure. It is then applied in a Cournot oligopoly for an outside innovator. Finally, in a Cournot duopoly it is shown that when the innovator is one of the incumbent firms rather than an outsider, the equivalence result does not hold.     

THE OPTIMAL LISTING STRATEGIES IN ONLINE AUCTIONS

This article proposes a unified framework to completely characterize the seller's optimal listing strategy in the online auction as a function of her rate of time impatience. Specifically, the fixed‐price listing, the regular auction, and the buy‐it‐now (BIN) auction are each a solution of the seller's single optimization problem under different values of the rate of intertemporal discount: The perfectly patient seller adopts the regular auction, the sellers with a medium range of time impatience adopt the BIN auction, and the most impatient of sellers adopt the fixed‐price listing. Moreover, under mild conditions, the reverse price is inversely related to the value of the seller's discount factor, either within or across formats. This in turn implies that the posted price in the fixed‐price sale is greater than the reserve price of the BIN auction, followed by that of the regular auction. These predictions offer clear empirical implications.     

FEE VERSUS ROYALTY POLICY IN LICENSING THROUGH BARGAINING: AN APPLICATION OF THE NASH BARGAINING SOLUTION

In this paper, we consider a Cournot duopoly market in which the patent‐holding firm negotiates with its rival firm about payments for licensing a cost‐reducing innovation. Applying the Nash bargaining solution, we compare two licensing policies, a fixed fee and a royalty. Our results are as follows. Royalty licensing is better than fixed fee licensing for both firms if the innovation is not drastic. So, royalty licensing is always carried out. Moreover, though there exists a case in which consumers prefer fixed fee licensing, royalty licensing is always superior to fixed fee licensing from the social point of view.     

Auctions with a buy price: The case of reference-dependent preferences

In an auction with a buy price, the seller provides bidders with an option to end the auction early by accepting a transaction at a posted price. This paper develops a model of an auction with a buy price in which bidders use the auction's reserve price and buy price to formulate a reference price. The model both explains why a revenue-maximizing seller would want to augment her auction with a buy price and demonstrates that the seller sets a higher reserve price when she can affect the bidders' reference price through the auction's reserve price and buy price than when she can affect the bidders' reference price through the auction's reserve price only. The comparative statics properties of bidding behavior are in sharp contrast to equilibrium behavior in other models where the existence and size of the auction's buy price have no effect on bidding behavior.     

Patent Licensing in the Presence of Trade Barriers

We develop a two‐country duopoly model to explore the optimal licensing contract for an outsider licensor in terms of fixed‐fee and royalty licensing by taking into account trade barriers when firms produce a homogeneous product and engage in Bertrand competition in each market. The present paper focuses on the interaction between licensing and trade barriers in two international markets. We show that both royalty and non‐exclusive fixed‐fee licensing can be optimal. Furthermore, exclusive fixed‐fee licensing can be optimal, which is a result that is not discussed in the existing literature.     

Sequentially Optimal Auctions

In auctions where a seller can post a reserve price but if the object fails to sell cannot commit never to attempt to resell it, revenue equivalence between repeated first price and second price auctions without commitment results. When the time between auctions goes to zero, seller expected revenues converge to those of a static auction with no reserve price. With many bidders, the seller equilibrium reserve price approaches the reserve price in an optimal static auction. An auction in which the simple equilibrium reserve price policy of the seller mirrors a policy commonly used by many auctioneers is computed.Journal of Economic LiteratureClassification Numbers: C78, D44, D82.     

Mixed Competition and Patent Licensing

This paper studies the patent licensing decision of an insider patentee when two firms engage in a mixed (Cournot–Bertrand or Bertrand–Cournot) competition where one firm adopts the quantity strategy while the other uses the price strategy and vice versa. If either the fixed fee or royalty is applied, then the licensor prefers the fixed fee when the licensor takes the quantity strategy, while the licensee uses the price strategy (Cournot–Bertrand). If the two‐part tariff is applied, then the two‐part tariff is more likely to be adopted by the licensor under Cournot–Bertrand than under Bertrand–Cournot competition.     

道德风险和多产出条件下技术许可中的技术定价机制

利用现代契约经济学的分析方法,从机制设计的角度,分析了道德风险和多种产出条件下技术许可中的技术定价机制。得出如下结论:当道德风险存在于技术使用者一方时,技术所有者采用纯固定费用的技术定价形式;在道德风险和多种产出的条件下,技术所有者确定的固定价格随着似然率的增大而减小,如果似然率具有单调似然率的特点,那么技术所有者确定的固定价格是技术产品产出或其状态的单调递减函数。     

Optimal patent licensing—Two or three-part tariff

We look into technology transfer by an insider patentee in a spatial duopoly model under three types of licensing contracts—(i) two-part tariff with fixed fee and per-unit royalty, (ii) two-part tariff with fixed fee and ad-valorem royalty and (iii) general three-part tariff with fixed fee, per-unit and ad-valorem royalties. Under two-part tariff contracts, the licenser is better off with the per-unit royalty contract but the general contract does better than the other contracts. In contrast to the existing literature, all three licensing contracts may make the consumers worse-off compared to no licensing, with the lowest consumer surplus achieved under the general licensing contract. Welfare under the general licensing contract is equal to the welfare under two-part tariff with ad-valorem royalty and it is higher than the welfare under no licensing but lower than the welfare under two-part tariff with per-unit royalty. Hence, the general three-part licensing contract is privately optimal but not socially optimal. Similar conclusions hold also under a nonspatial linear demand model with differentiated products.     

道德风险条件下高校产学研合作中价格契约研究

利用技术许可中价格契约的基本理论,对高校产学研合作中存在于企业的道德风险问题的价格契约治理机制进行了分析。分析结果表明,在产学研合作中,当企业存在道德风险问题时,一个次优产学研合作的价格契约是一个纯固定费用的价格契约;同时,高校为了对企业进行有效激励,将对企业进行一定的信息租的转移。     

How do selling mechanisms affect profits,surplus, capacity and prices with unknown demand?

I analyze a model in which a seller wishes to sell multiple homogeneous goods to a large group of buyers with unknown demand. The seller may either sell objects via a posted‐price mechanism, a discriminatory‐price auction, a uniform‐price auction, their open‐bid analogs, or a revelation mechanism in which the seller first asks all potential buyers to report their valuations and then sets a reserve price. I show that the revelation mechanism leads to the greatest profits, the auction mechanisms result in identical expected profits and the posted‐price mechanism results in the smallest profits. However, the more profitable mechanisms impose stronger informational requirements that may make these mechanisms infeasible in practice, and the posted‐price mechanism also results in the greatest total surplus. I also find the seller chooses a lower capacity and reserve price in an auction than in the posted‐price mechanism.     

On the superiority of fixed fee over auction in asymmetric markets

It is well known that selling licenses for the use of a cost-reducing innovation by auction yields a higher revenue compared to fixed fee in a symmetric Cournot industry. In this note we show that this result can be reversed in an asymmetric Cournot industry, i.e., the fixed fee policy can generate a strictly higher revenue than the auction policy in an industry where prior to the innovation firms are cost-asymmetric.     

Optimal auctions with information acquisition

This paper studies optimal auction design in a private value setting with endogenous information gathering. We develop a general framework for modeling information acquisition when a seller wants to sell an object to one of several potential buyers, who can each gather information about their valuations prior to participation in the auction. We first demonstrate that the optimal monopoly price is always lower than the standard monopoly price. We then show that standard auctions with a reserve price remain optimal among symmetric mechanisms, but the optimal reserve price lies between the ex ante mean valuation of bidders and the standard reserve price in Myerson (1981). Finally, we show that the optimal asymmetric mechanism softens the price discrimination against “strong” bidders.     

How does a mixed ownership firm license a patent?

This paper demonstrates that a cost disadvantaged innovator increasingly relies on licensing with a fixed fee as its public ownership share grows. Moreover, when the innovation is drastic, a cost disadvantaged innovator frequently licenses by fixed fee when it has a public share even as a fully private firm will never use a fixed fee. As the fixed fee improves welfare, these results suggest that the licensing method of a partial public firm helps correct the market failure of imperfect competition.     

Quality differentiation and product innovation licensing

Evidence reveals that there are more than 50% product innovation licensings applied within industries. We study product innovation licensing (quality-enhancing licensing) in both exclusive and non-exclusive schemes each under unit/revenue royalty and fixed fee in a vertically differentiated Cournot oligopoly, where a quality-leading firm is an internal licensor. We show that, under a non-exclusive licensing, royalty licensing is the superior policy for the licensor if quality difference within firms is small, regardless of whether a unit or revenue royalty scheme is offered. Under an exclusive licensing, a two-part tariff is optimal. If fixed fee licensing is practicable, the licensor favors an exclusive licensing. Furthermore, an increase in quality difference within firms increases the optimal rates. Using the simulated results, we examine that licensing improves social welfare in all schemes, and the number of licensees will influence the magnitude of welfare enhancement.     

技术许可中道德风险问题的价格契约治理机制研究

本文利用现代契约经济学基本理论,对同一技术条件下、由技术使用者替代性投入行为而产生的道德风险问题的价格契约治理机制进行了分析。分析结果表明,技术所有者总可以设计一种分离价格契约治理道德风险问题,其中,对自己偏好的高成本投入行为采用纯固定费用,而对低成本投入行为采用“固定费用 提成费”。本文进一步认为,价格契约中提成费比率对成本效率较高的投入行为所造成的扭曲程度,要大于成本效率较低的投入行为。     

技术许可中道德风险问题的价格契约治理机制研究

本文利用现代契约经济学基本理论，对同一技术条件下、由技术使用者替代性投入行为而产生的道德风险问题的价格契约治理机制进行了分析。分析结果表明，技术所有者总可以设计一种分离价格契约治理道德风险问题，其中，对自己偏好的高成本投入行为采用纯固定费用，而对低成本投入行为采用“固定费用＋提成费”。本文进一步认为，价格契约中提成费比率对成本效率较高的投入行为所造成的扭曲程度，要大干成本效率较低的投入行为。     

Reserve Prices without Commitment

When potential bidders in an auction have to incur a cost to prepare their bids and thus to learn their valuations, imposing a reserve price and announcing that in case no bid is submitted there will be another auction without a reserve price is both revenue and welfare improving. Reserve prices that induce less than maximum entry in the first auction may be optimal. Also, entry fees are not necessarily better instruments than reserve prices.Journal of Economic LiteratureClassification Number: D44.     

Competitive auctions

We study a class of single-round, sealed-bid auctions for an item in unlimited supply, such as a digital good. We introduce the notion of competitive auctions. A competitive auction is truthful (i.e. encourages bidders to bid their true valuations) and on all inputs yields profit that is within a constant factor of the profit of the optimal single sale price. We justify the use of optimal single price profit as a benchmark for evaluating a competitive auctions profit. We exhibit several randomized competitive auctions and show that there is no symmetric deterministic competitive auction. Our results extend to bounded supply markets, for which we also give competitive auctions.