On Moral Hazard and Joint R&D
This paper analyzes how the determinants of two entrepreneurs’ choice whether to conduct product innovation R&D projects alone, or in a cross license agreement, or in a research joint venture depend on the intrinsic nature of the R&D projects. Results show that in fundamental research -- which is considered to be affected by moral hazard behavior of the researchers -- there is a systematic bias toward conducting R&D projects alone and against making use of synergies in an RJV. Furthermore, from a social standpoint, in non-fundamental research -- which is considered not to be affected by moral hazard behavior of the researchers -- too few RJVs and too few cross license agreements are chosen; whereas in fundamental research too few RJVs, and too many cross license agreements are chosen.
|Date of creation:||Jan 2007|
|Date of revision:|
|Contact details of provider:|| Postal: Department of Economics, University of Keele, Keele, Staffordshire, ST5 5BG - United Kingdom|
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|Order Information:|| Postal: Centre for Economic Research, Research Institute for Public Policy and Management, Keele University, Staffordshire ST5 5BG - United Kingdom|
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