Attracting skeptical buyers: Negotiating for intellectual property rights

Journal Article (Journal Article)

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. © 2008 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

Full Text

Duke Authors

Cited Authors

  • Anton, JJ; Yao, DA

Published Date

  • February 1, 2008

Published In

Volume / Issue

  • 49 / 1

Start / End Page

  • 319 - 348

Electronic International Standard Serial Number (EISSN)

  • 1468-2354

International Standard Serial Number (ISSN)

  • 0020-6598

Digital Object Identifier (DOI)

  • 10.1111/j.1468-2354.2008.00481.x

Citation Source

  • Scopus