On the core of a patent licensing game

This note revisits the impossibility result shown by Watanabe and Muto (2008) that almost all outcomes cannot be in the core of a patent licensing game. To overcome this difficulty, we consider a weaker stability concept by restricting objections against payoff distributions to the ones made under an exogenously fixed payment scheme and a payment rate. In contrast to their result, we demonstrate that the coalition structures in which licensee firms are the majority can be stable in this sense. However, such a possibility result breaks down if we allow negotiations on the payment rate.