The equivalence of profit-sharing licensing and per-unit royalty licensing

In a duopoly with symmetric product differentiations, we prove that profit-sharing licensing and per-unit royalty licensing are equivalent to each other regarding both the profitability and the welfare influences.

► We discuss public policy towards profit-sharing licensing. ► The equivalence of per-unit royalty licensing and profit-sharing licensing is proved. ► The conclusion provides a policy-wise justification for partial integrations.