In patent litigation, the ruling against the 25% Rule has led some plaintiff's experts to search for a methodology to replace it. Some of these experts are putting forward claims based on a 50/50 split of profits by claiming that it is the result of the Nash Bargaining Solution. This is not only a misreading of Nash's work; the economic community has not accepted that Nash Bargaining is a good predictor of outcomes in the real world. The 50/50 split posited by Nash requires a set of assumptions that are not true in actual negotiations. One valuable insight in Nash Bargaining is that the parties are negotiating over a surplus that is equal to the benefits achievable from cooperating minus the sum of the payoffs each side is able to get without cooperating.
Full articles are available only to LESI Members. Please login to view the PDF of this Les Nouvelles Article.
Not an LESI member? Find out how to join your regional LES society and gain access to all that your LES society and LESI has to offer.