This paper investigates the impact of royalty revision on incentives and profits in a twostage (R&D stage and marketing stage) alliance with a marketer and an innovator. The marketer offers royalty contracts to the innovator. We find the potential for royalty revision leads to more severe distortions in the optimal initial royalty contracts offered by the marketer. We show if the innovator play...

This paper revisits the licensing of a non–drastic process innovation by an outside innovator to a Cournot oligopoly. We propose a new mechanism that combines a restrictive license auction with royalty licensing. This mechanism is more profitable than standard license auctions, auctioning royalty contracts, fixed–fee licensing, pure royalty licensing, and two-part tariffs. The key features are ...

Whilst few studies have explored royalty negotiations for build, operate and transfer (BOT) projects, some works have proposed numerous royalty formulas to evaluate royalty amounts or franchise fees for a BOT project. Despite this, the royalty negotiation process is one of the many critical negotiation items of a concession contract. This study not only developed a royalty negotiation model for...

Concerns about climate change have led to calls for reforming or eliminating the extensive US federal fossil fuel leasing program. One proposed reform is adding a surcharge existing royalty rate. We consider determining this by maximizing social welfare, including damages from combusting fuels and value of raising revenue when marginal public funds exceeds one. estimate that resulting would lea...

We consider patent licensing under a simple model of asymmetric information, where an outsider innovator of a cost-reducing innovation interacts with a monopolist, whose cost is private information. When the innovator is endowed with combinations of fixed fee and royalty, in any optimal menu, the low-cost monopolist is always offered a pure fixed fee contract, while for the contract offered to ...

The recent oil and gas production boom in the contiguous United States generated tens of billions in additional royalty income for owners of oil and gas rights. We use the royalty income shock to study the local multiplier effect of unanticipated income and find that each royalty dollar received by county residents created an additional $0.50 in local income, mostly through greater wage income....