On the inefficiencies of anti-stacking royalty clauses

Research output: Contribution to journalArticlepeer-review

Abstract

When negotiating with multiple licensors, anti-stacking royalty clauses allow the licensee to reduce its payment to the original licensor in proportion to the royalty rate of subsequent licensors. I show that these clauses increase the licensing burden on the licensee and lead to higher prices and smaller output. The licensee and the original licensor could increase the profits of all parties by removing the anti-stacking clause.

Original languageEnglish (US)
Article number110890
JournalEconomics Letters
Volume221
DOIs
StatePublished - Dec 2022

Keywords

  • Ad valorem rates
  • Anti-stacking clause
  • Licensing
  • Royalty stacking

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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