Price and cooperation decisions in a cooperative R&D supply chain with different licensing models
ISSN: 0368-492X
Article publication date: 7 September 2022
Issue publication date: 28 November 2023
Abstract
Purpose
Industry practice has shown that technology licensing has an important effect on the R&D cooperation between firms. Different licensing methods will significantly impact a supply chain member's cooperative and price R&D decisions. However, there is scant literature investigating the decision on technology licensing and its impact on a supply chain member's price and cooperative R&D decisions. To address this gap, the authors investigate the R&D cooperation and the technology licensing in a supply chain formed of an original equipment manufacturer (OEM), a contract manufacturer (CM), and a third-party manufacturer which will compete with the OEM when the technology licensing occurs.
Design/methodology/approach
The authors investigate two licensing patterns, royalty licensing, fixed fee licensing together with the no licensing, within the R&D cooperative supply chain by developing two three-stage and a two-stage Stackelberg models.
Findings
Compare to the no licensing strategy, technology licensing always benefits to the OEM and the society especially when the technology efficiency and the brand power of the third-party manufacturer are more significant; the royalty licensing benefits to the OEM more when the technology efficiency and the brand power of the third-party manufacturer are higher; the fixed fee licensing benefits to the OEM more when the technology efficiency and the brand power of the third-party manufacturer are lower.
Practical implications
The royalty licensing is more effective for mitigating price competition intensity and helping firms to maintain higher sales margins; the fixed fee licensing induces firms' lower sales margins but increases the firms' sales quantities; in most cases, the fixed fee licensing is optimal from the perspectives of consumer and society, however, the CM's investment intention to the R&D technology with the fixed fee licensing is lower.
Originality/value
So far, different licensing models under the R&D cooperation have not been investigated, and the authors propose two three-stage Stackelberg models with considering the competition caused by technology licensing under the R&D cooperation to deal with the cooperative R&D and technology licensing issues.
Keywords
Citation
Yan, F., Chen, H.-Z. and Zhang, Z. (2023), "Price and cooperation decisions in a cooperative R&D supply chain with different licensing models", Kybernetes, Vol. 52 No. 12, pp. 5776-5810. https://doi.org/10.1108/K-12-2021-1347
Publisher
:Emerald Publishing Limited
Copyright © 2022, Emerald Publishing Limited