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  • February 2008
  • Article
  • International Economic Review

Attracting Skeptical Buyers: Negotiating for Intellectual Property Rights

By: James J. Anton and Dennis A. Yao
  • Format:Print
  • | Pages:30
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Abstract

Expropriable disclosures of knowledge to prospective buyers may be necessary to facilitate the sale of intellectual property (IP). In principle, confidentiality agreements can protect disclosures by granting the seller rights to sue for unauthorized use. In practice, sellers often waive confidentiality rights. We provide an incomplete information explanation for the waiver of confidentiality rights that are valuable in complete information settings. Waiving sacrifices the protective value of confidentiality to gain greater buyer participation. Buyer skepticism, which reduces participation, arises endogenously from three elements: asymmetric information regarding seller IP, rent dissipation from competition for IP, and ex post costs from expropriation lawsuits.

Keywords

Corporate Disclosure; Intellectual Property; Knowledge Sharing; Lawsuits and Litigation; Rights; Agreements and Arrangements; Competition

Citation

Anton, James J., and Dennis A. Yao. "Attracting Skeptical Buyers: Negotiating for Intellectual Property Rights." International Economic Review 49, no. 1 (February 2008): 319–348. (Harvard users click here for full text.)
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About The Author

Dennis A. Yao

Strategy
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