Format:
1 Online-Ressource (41 p)
Content:
This paper looks at the outsourcing of research and development (Ramp;D) activities. We consider cost reducing Ramp;D and allow manufacturing firms to decide whether to outsource the project to research subcontractors or carry out the research in-house. We use a principal-agent framework and consider fixed and revenue-sharing contracts. We solve for the optimal contract under these constraints. We find that allowing for revenue-sharing contracts increases the chance of outsourcing and improves economic efficiency. However, the principal may still find it optimal to choose a contract that allows the leakage to occur -- a second-best outcome when leakage cannot be monitored or verified. Moreover, stronger protection of intellectual property need not induce more Ramp;D outsourcing nor improve welfare
Note:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments September 2005 erstellt
Language:
Undetermined
