Bargaining outcomes in patent licensing: Asymptotic results in a general Cournot market

We study asymptotic bargaining outcomes in licensing a patented technology of an external patent holder to firms in a general Cournot market. Our results are as follows: when the number of firms is large, the bargaining set for each permissible coalition structure suggests that the patent holder should extract the entire profits of all licensees. The outcome that the bargaining finally reaches exactly coincides with the non-cooperative outcome, and it cannot be improved upon even by any objections with almost zero cost. Thus, it is strongly stable. The fair allocation represented by the Aumann-Dreze value is, however, not realized as such a stable bargaining outcome. (C) 2010 Elsevier B.V. All rights reserved.