Stable profit sharing in a patent licensing game: general bargaining outcomes

Considering coalition structures formed by an external licensor of a patented technology and oligopolistic firms, we investigate licensing agreements that can be reached as the bargaining outcomes under those coalition structures. The cores for coalition structures are empty, unless the grand coalition forms. We give the necessary and sufficient condition for the core (for the grand coalition) being non-empty. If the number of licensees that maximizes their total surplus is greater than the number of existing non-licensees, each symmetric bargaining set for a coalition structure is a singleton and the optimal number of licensees that maximizes the licensor’s revenue is uniquely determined. All the results are derived in a generalized patent licensing game. JEL Classification Numbers : C71; D45; D43