I have a blog post that describes the effective length (as well as these different relative abundance units). The short explanation is that what people refer to as the "effective length" is actually the expected effective length (i.e., the expectation, in a statistical sense, of the effective length). The notion of effective length is actually a property of a transcript, fragment pair, and is equal to the number of potential starting locations for a fragment of this length on the given transcript. If you take the average, over all fragments mapping to a transcript (potentially weighted by the conditional probability of this mapping), this quantity is the expected effective length of the transcript. This is often approximated as simply l_i - \mu, or l_i - \mu_{l_i} --- where \mu_{l_i} is the mean of the conditional fragment length distribution (conditioned on the fragment length being < l_i to account for exactly the issue that you raise).

I have a blog post that describes the effective length (as well as these different relative abundance units). The short explanation is that what people refer to as the "effective length" is actually the expected effective length (i.e., the expectation, in a statistical sense, of the effective length). The notion of effective length is actually a property of a transcript, fragment pair, and is equal to the number of potential starting locations for a fragment of this length on the given transcript. If you take the average, over all fragments mapping to a transcript (potentially weighted by the conditional probability of this mapping), this quantity is the expected effective length of the transcript. This is often approximated as simply $l_i - \mu$, or $l_i - \mu_{l_i}$ --- where $\mu_{l_i}$ is the mean of the conditional fragment length distribution (conditioned on the fragment length being < $l_i$ to account for exactly the issue that you raise).