Inés Macho-Stadler

The Role of Information in Licensing Contract Design

Abstract This paper analyzes the contract terms of licensing agreements, based on a sample of contracts of transmission of technology between Spanish and foreign firms. It also presents a model that is in accordance with some stylized facts. We will focus our attention on the elements that explain the contract terms. In particular we analyze the consequences of the inclusion of know-how in the license agreement on the contract terms.

RESEARCH OUTPUT FROM UNIVERSITY-INDUSTRY COLLABORATIVE PROJECTS *

We study collaborative and noncollaborative projects that are supported by government grants. First, we propose a theoretical framework to analyze optimal decisions in these projects. Second, we test our hypotheses with a unique data set containing academic publications and research funds for all academics at the major university engineering departments in the United Kingdom. We find that the type of the project (measured by its level of appliedness) increases the type of both the university and firm partners. Also, the quality of the project (number and impact of the publications) increases with the quality of the researcher and firm, and with the affinity in the partners’ preferences. The collaboration with firms increases the quality of the project only when the firms’ characteristics make them valuable partners.

Sharing the surplus: An extension of the Shapley value for environments with externalities

Economic activities, both on the macro and micro level, often entail wide-spread externalities. This in turn leads to disputes regarding the compensation levels to the various parties affected. We propose a method of deciding upon the distribution of the gains (costs) of cooperation in the presence of externalities when forming the grand coalition is efficient. We show that any sharing rule satisfying efficiency, linearity, dummy player and a strong symmetry axioms can be obtained through an average game. Adding an additional axiom, we identify one unique rule satisfying these properties.

Centralized and Decentralized Contracts in a Moral Hazard Environment

The authors study the optimal allocation of the contracting capacity in a moral hazard environment. Centralizing is superior when the principal is able to establish all the contracts with the agents simultaneously and she is able to monitor side contracting between the agents. Otherwise, decentralizing can be a superior strategy. The authors apply their results to a firms decision on which outlets to franchise. They suggest that franchising is more likely to occur the further the store is from headquarters, the more isolated it is, and in those activities where the risk is low. This conclusion is consistent with empirical studies. Copyright 1998 by Blackwell Publishing Ltd

Designing Contracts for University Spin-offs

We provide a theoretical model about how to design academic spin-off contracts between the university technology transfer office (TTO), the researcher, and the venture capitalist. The optimal contract entails the allocation of founder shares to the researcher to secure her participation in the venture. It may also require the researcher to be financially involved in the project to give her incentives to provide effort. We also show that when the TTO has better information than the other two participants concerning the likelihood of success of the spin-off, it will end up owning both founder and financial shares in the venture.

OPTIMAL AUDITING WITH HETEROGENEOUS INCOME SOURCES

The optimal enforcement policy when households are heterogeneous, with respect to both income level and to income source, leads to more intense income auditing for easy to-monitor sources. The authors obtain the common result that within each income source any taxpayer reporting less than a predetermined cut-off level will be audited, while taxpayers reporting at least this level will never be audited. However, this audit policy leads to very different reporting behavior depending on the income source. The Internal Revenue Service does not audit only honest taxpayers, and an increase in the audit budget may lead to a larger segment of full evaders. Copyright 1997 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Contrats de licences et asymetrie d'information

This paper deals with the form of licencing contracts when there is asymmetric information. We show that when the licensor has private information he can signals the high quality patents through contracts based on royalties. Conversely, when the licensee has more information about the value of the patent, contracts including only a fixed fee attract those for whom the innovation has a high value.

Strategic managerial incentives and cross ownership structure: A note

In this note, we study the behavior of firms competing in a Cournot duopoly framework where owners and managers are separate identities and where cross-participation at the ownership level exists. We find that depending on the degree of cross ownership, managerial incentives may be more or less towards profit maximizing behavior. Moreover we show that limited cross-participation may be a way for owners to obtain “collusive behavior” without apparently offending “Anti-Trust” laws.

A theoretical approach to dual practice regulations in the health sector

Internationally, there is wide cross-country heterogeneity in government responses to dual practice in the health sector. This paper provides a uniform theoretical framework to analyze and compare some of the most common regulations. We focus on three interventions: banning dual practice, offering rewarding contracts to public physicians, and limiting dual practice (including both limits to private earnings of dual providers and limits to involvement in private activities). An ancillary objective of the paper is to investigate whether regulations that are optimal for developed countries are adequate for developing countries as well. Our results offer theoretical support for the desirability of different regulations in different economic environments.

Endogenous formation of competing partnerships with moral hazard

Abstract We analyze the formation of competing partnerships as a sequential game with moral hazard within coalitions. In a linear Cournot model, we show that when moral hazard is very severe, no partnerships will form. However, when moral hazard is not too severe, the coalition structure may be more concentrated than it is in the absence of moral hazard. Concerning industry profits, in the absence of moral hazard too many coalitions are formed in equilibrium as compared to the efficient outcome, but moral hazard may be responsible for an inefficiency of opposite sign.