On Moral Hazard and Joint R&D

Simona Fabrizi () and Steffen Lippert

No KERP 2007/03, Keele Economics Research Papers from Centre for Economic Research, Keele University

Abstract: 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.

Keywords: Monetary policy; zone of discretion; intermediate inflation target. (search for similar items in EconPapers)
JEL-codes: D23 D82 L24 O31 O32 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2007-01
New Economics Papers: this item is included in nep-ino, nep-ipr, nep-pr~, nep-mic and nep-ppm
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Persistent link: https://EconPapers.repec.org/RePEc:kee:kerpuk:2007/03

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