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DO PATENT HOLDUP AND ROYALTY STACKING LEAD TO SYSTEMATICALLY EXCESSIVE ROYALTIES?
2008
Journal of Competition Law & Economics
Some recent literature has concluded that patent remedies result in systematically excessive royalties because of holdup and stacking problems. This article shows this literature is mistaken. The royalty rates predicted by the holdup models are often (plausibly most of the time) below the true optimal rate. Further, those predicted royalty rates are overstated because of incorrect assumptions about constant demand, one-shot bargaining, and informational symmetry. Although this literature
doi:10.1093/joclec/nhn027
fatcat:s3hccoqd5bdpflkv5bprxl6e64