Price commitments in standard setting under asymmetric information
Boone,Jan Schuett,Florian Tarantino,Emanuele
Boone,Jan
Schuett,Florian
Tarantino,Emanuele
Abstract
Standards may create market power for the holders of standard essential patents (SEPs). To address these concerns, the literature advocates price commitments, whereby SEP holders commit to the maximum royalty they would charge were their technology included in the standard. We consider a setting in which a technology implementer holds private information about profitability. In this setting, price commitments increase efficiency not only by curbing SEP holders' market power, but also by alleviating distortions in the design of the royalty scheme. We derive conditions under which price commitments can be implemented using a simple royalty cap as used in practice.
Description
Date
2024-03
Journal Title
Journal ISSN
Volume Title
Publisher
Research Projects
Organizational Units
Journal Issue
Keywords
Ex-ante agreements, Essential patents, Organizations, Rules
Citation
Boone, J, Schuett, F & Tarantino, E 2024, 'Price commitments in standard setting under asymmetric information', Journal of Industrial Economics, vol. 72, no. 1, pp. 3-19. https://doi.org/10.1111/joie.12351