Innovation contracts with leakage through licensing
In this paper a Developer contracts with a Researcher for the production of a non-drastic innovation. Since effort is non-contractible, the Developer offers an incentive contract dependent on the observed magnitude of the innovation. It is shown that the distribution of intellectual property rights (IPR) ownership does not affect the level of effort exerted for innovations where the Developer would choose to license the innovation to its competitors. This is because the possibility of leakage of the innovation through licensing subsidies the Developer's payment when IPR is delegated to the Researcher, while at the same time eroding its profit.
|Date of creation:||05 Oct 2010|
|Date of revision:||05 Oct 2010|
|Publication status:||Published by the University of Tasmania. Discussion paper 2010-11|
|Contact details of provider:|| Postal: |
Phone: +61 3 6226 7672
Fax: +61 3 6226 7587
Web page: http://www.utas.edu.au/economics-finance/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hernandez-Murillo, Ruben & Llobet, Gerard, 2006.
"Patent licensing revisited: Heterogeneous firms and product differentiation,"
International Journal of Industrial Organization,
Elsevier, vol. 24(1), pages 149-175, January.
- Rubén Hernández-Murillo & Gerard Llobet, 2004. "Patent licensing revisited: heterogeneous firms and product differentiation," Working Papers 2002-031, Federal Reserve Bank of St. Louis.
- Martimort, David & Poudou, Jean-Christophe & Sand-Zantman, Wilfried, 2009.
"Contracting for an Innovation under Bilateral Asymmetric Information,"
IDEI Working Papers
448, Institut d'Économie Industrielle (IDEI), Toulouse.
- Martimort, David & Poudou, Jean-Christophe & Sand-Zantman, Wilfried, 2009. "Contracting for an Innovation under Bilateral Asymmetric Information," TSE Working Papers 09-058, Toulouse School of Economics (TSE).
- Martimort, D. & Poudou, J.-C. & Sand-Zantman, W., 2006. "Contracting for an Innovation under Bilateral Asymmetric Information," Cahiers du LASER (LASER Working Papers) 2006.19, LASER (Laboratoire de Science Economique de Richter), Faculty of Economics, University of Montpellier 1.
- Bengt Holmstrom, 1997.
"Moral Hazard and Observability,"
Levine's Working Paper Archive
1205, David K. Levine.
- Josh Lerner & Julie Wulf, 2007.
"Innovation and Incentives: Evidence from Corporate R&D,"
The Review of Economics and Statistics,
MIT Press, vol. 89(4), pages 634-644, November.
- Josh Lerner & Julie Wulf, 2006. "Innovation and Incentives: Evidence from Corporate R&D," NBER Working Papers 11944, National Bureau of Economic Research, Inc.
- Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
- Bhattacharya, Sudipto & Ritter, Jay R, 1983. "Innovation and Communication: Signalling with Partial Disclosure," Review of Economic Studies, Wiley Blackwell, vol. 50(2), pages 331-46, April.
- Versaevel Bruno & Vencatachellum Désiré, 2009.
"R&D Delegation in a Duopoly with Spillovers,"
The B.E. Journal of Economic Analysis & Policy,
De Gruyter, vol. 9(1), pages 1-42, December.
- Bruno Versaevel & Désiré Vencatachellum, 2006. "R&D Delegation in a Duopoly with Spillovers," Working Papers 0610, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
- Désiré Vencatachellum & Bruno Versaevel, 2005. "R&D Delegation in a Duopoly with Spillovers," Cahiers de recherche 05-01, HEC Montréal, Institut d'économie appliquée.
- Désiré Vencatachellum & Bruno Versaevel, 2006. "R&D Delegation in a Duopoly with Spillovers," Post-Print halshs-00142520, HAL.
- Sudipto Bhattacharya & Sergei Guriev, 2005.
"Patents vs trade secrets: knowledge licensing and spillover,"
LSE Research Online Documents on Economics
444, London School of Economics and Political Science, LSE Library.
- Sudipto Bhattacharya & Sergei Guriev, 2006. "Patents vs. Trade Secrets: Knowledge Licensing and Spillover," Journal of the European Economic Association, MIT Press, vol. 4(6), pages 1112-1147, December.
- Sudipto Bhattacharya & Sergei Guriev, 2004. "Patents vs Trade Secrets: Knowledge Licensing and Spillover," Working Papers w0064, Center for Economic and Financial Research (CEFIR), revised Feb 2006.
- Sudipto Bhattacharya & Sergei Guriev, 2006. "Patents VS Trade Secrets: Knowledge Licensing and Spillover," Sciences Po publications info:hdl:2441/3jesolrqda8, Sciences Po.
- James J. Anton & Dennis A. Yao, 2004. "Little Patents and Big Secrets: Managing Intellectual Property," RAND Journal of Economics, The RAND Corporation, vol. 35(1), pages 1-22, Spring.
- Morton I. Kamien & Yair Tauman, 1984.
"Fees Versus Royalties and the Private Value of a Patent,"
583, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Kamien, Morton I & Tauman, Yair, 1986. "Fees versus Royalties and the Private Value of a Patent," The Quarterly Journal of Economics, MIT Press, vol. 101(3), pages 471-91, August.
- Anton, James J & Yao, Dennis A, 2002. "The Sale of Ideas: Strategic Disclosure, Property Rights, and Contracting," Review of Economic Studies, Wiley Blackwell, vol. 69(3), pages 513-31, July.
- Bergmann, Rouven & Friedl, Gunther, 2008. "Controlling innovative projects with moral hazard and asymmetric information," Research Policy, Elsevier, vol. 37(9), pages 1504-1514, October.
- Nancy T. Gallini & Brian D. Wright, 1990. "Technology Transfer under Asymmetric Information," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 147-160, Spring.
When requesting a correction, please mention this item's handle: RePEc:tas:wpaper:10282. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Derek Rowlands)
If references are entirely missing, you can add them using this form.