Intellectual Property Contracts: Theory and Evidence from Screenplay Sales
59 Pages Posted: 12 Mar 2012 Last revised: 11 Apr 2013
There are 2 versions of this paper
Intellectual Property Contracts: Theory and Evidence from Screenplay Sales
Intellectual Property Contracts: Theory and Evidence from Screenplay Sales
Date Written: August 14, 2012
Abstract
This paper presents a model of intellectual property contracts. We explain why many intellectual property contracts are contingent on eventual production or success, even without moral hazard on the part of risk-averse sellers. The explanation is based on differences of opinion between buyers and sellers, and reputation building through multiple transactions. Our model predicts that more reputable sellers will be offered a very different mix of cash and contingency payments than inexperienced sellers. We also discuss the probability of sales as a function of seller and product characteristics. The theoretical model is tested on a data base of screenplay contracts.
Keywords: Intellectual property, contracting, divergence of beliefs, reputation, screenplays
JEL Classification: G30, L14
Suggested Citation: Suggested Citation
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