Textbook models fail to explain royalty and fee-pricing arrangements in the patent and trade-secret licenses discussed here. A theory of royalty pricing as an efficient tax and as a performance bond explains more. Royalty taxes help coordinate user outputs to maximize the joint value of a common customer pool. Royalties, by tying owner income to licensee sales directly, also encourage owners to protect rights against infringement over time. Copyright 1991 by University of Chicago Press.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
When requesting a correction, please mention this item's handle: RePEc:ucp:jnlbus:v:64:y:1991:i:1:p:21-48. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division)
If references are entirely missing, you can add them using this form.