This chapter reviews the growing literature on the “market for technology,” a broad term that
denotes trade in technology disembodied from physical goods. The market for technology
flourished during the nineteenth century in the United States. After several decades of
relative decline, the market for technology has once again grown considerably in recent
years, although the growth is uneven across sectors and across countries. Thus far, the
literature has paid most attention to the supply of technology, and on the efficiency of market …

In technology-based industries, incumbent firms often license their technology to potential
competitors. Such a strategy is difficult to explain within traditional models of licensing. This
paper extends the literature on licensing by relaxing the assumption of a monopolist
technology holder. Competition in the market for technology induces licensing of innovations
and incumbent firms may find it privately profitable to license although their joint profits may
well be higher in the absence of any licensing. A strong testable implication of our model is …