Dilemma of quality information disclosure in technology licensing

This study investigates the technology licensing decision of an incumbent patentor with quality-improving in duopoly model heterogenous consumers, and quality information disclosure strategies licensee that compete quantity. A is faced a dilemma whether to disclose product consumers when occurs encourage its information. While few scholars background licensing, these problems are importance for because can significantly influence consumer belief about generate different effects on patentor's profitability. We find benefit from choosing strategies. Under per-unit royalty we show may choose not but However, find, under fixed fee cost sufficiently low difference large, only large prior probability being high-quality motivate choice require disclose. Interestingly, our results also suggest leads more higher profits than fixed-fee licensing. Our work identifies optimal conditions which deal disclosure, proposes support tools evaluating values provides new management insights strategy