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Abstract
Given initial empirical observations of international licensing of, food and beer
brands, this paper presents a simple game-theoretic model of the motives for
licensing. In a situation of complete information, the model suggests that imperfect competition in overseas markets may be an important determinant of a branded
product licensing equilibrium, whilst incomplete information about incumbent firms'
payoffs and strategies and also repetition of the game may generate a sequence of
unsuccessful entry followed by licensing.