Publication

The Optimal Scope of the Royalty Base in Patent

6/25/14

In this paper we make use of the fact that these two royalty bases are equivalent to using ad-valorem and per-unit royalties, respectively. We analyze the welfare implication of the two rules abstracting from implementation and practicability considerations. We show that advalorem royalties tend to lead to lower prices, particularly in the context of successive monopolies.

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