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An estimate of the average cumulative royalty yield in the world mobile phone industry: Theory, measurement and results

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  • Galetovic, Alexander
  • Haber, Stephen
  • Zaretzki, Lew

Abstract

An influential literature argues that dispersed patent ownership may lead to royalty stacking and excessive running royalties, thus increasing the long-run marginal cost of manufacturing phones and their prices. One set of estimates claims that the royalty stack is on the order of 20–40 percent of the value of the average phone. In order to assess this claim, we estimate the average cumulative royalty yield—the sum total of patent royalty payments earned by licensors, divided by the total value of mobile phones shipped— in the world mobile phone industry between 2007 and 2016.

Suggested Citation

  • Galetovic, Alexander & Haber, Stephen & Zaretzki, Lew, 2018. "An estimate of the average cumulative royalty yield in the world mobile phone industry: Theory, measurement and results," Telecommunications Policy, Elsevier, vol. 42(3), pages 263-276.
    • Handle: RePEc:eee:telpol:v:42:y:2018:i:3:p:263-276
    DOI: 10.1016/j.telpol.2018.02.002
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    2. Heikkilä, Jussi & Rissanen, Julius & Ali-Vehmas, Timo, 2023. "Coopetition, standardization and general purpose technologies: A framework and an application," Telecommunications Policy, Elsevier, vol. 47(4).
    3. Sinitsyn, Maxim, 2022. "On the inefficiencies of anti-stacking royalty clauses," Economics Letters, Elsevier, vol. 221(C).
    4. Rossi, Maria Alessandra, 2022. "The advent of 5G and the non-discrimination principle," Telecommunications Policy, Elsevier, vol. 46(4).

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