We analyze patent licensing by a patent holder to downstream technology users. We study how the structure and level of royalties depends on the patent’s strength, i.e., the probability it would be upheld in court. We examine the social value of determining patent validity before licensing, in terms of deadweight loss (ex post) and innovation incentives (ex ante). When downstream users do not co...

The strength of strict churches is neither a historical coincidence nor a statistical artifact. Strictness makes organizations stronger and more attractive because it reduces free riding. It screens out members who lack commitment and stimulates participation among those who remain. Rational choice theory thus explains the success of sects, cults, and conservative denominations without recourse...