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Universität zu Köln
Wirtschafts- und Sozialwissenschaftliche Fakultät

Staatswissenschaftliches Seminar - Prof. Schmitz

Optimal Allocation of Ownership Rights in Dynamic R&D Alliances

Stephanie Rosenkranz and Patrick W. Schmitz

Games and Economic Behavior, Vol. 43 (1), 2003, 153-173.

Abstract. We explore the dynamic evolution of property rights regimes in R&D alliances using the incomplete contract approach pioneered by Grossman, Hart and Moore. In contrast to the standard analysis, the productive asset is an excludable public good such as a patent. Moreover, both firms can decide whether to disclose their know-how and invest effort. Know-how that has once been released cannot be concealed later. We characterize different scenarios in which the optimal ownership structure may change over time due to a trade-off between inducing know-how disclosure and ensuring maximum effort.

The working paper version is available for download (CEPR Discussion Paper 2698).

Another working paper version is available for download at SSRN.

The paper is available for download.