Speaker: Steffen Lippert
Affiliation: School of Economics and Finance, Massey University at Albany
Title: “On Moral Hazard and Joint R&D” (with Simona Fabrizi)
Date: Wednesday, 20 October
Time: 4:00 pm
Location: 301-242 [Science Centre, Symonds Street]

ABSTRACT

We analyze two entrepreneurs’ choices of how much to invest in competing product innovation projects, and whether to conduct them competitively, in a cross-licensing agreement, or in an R&D joint venture. We distinguish late and early-stage projects and allow for cooperative and non-cooperative conduct in the product market ensuing an R&D joint venture. We find that early-stage projects are more likely carried out as stand-alone R&D or in cross-licensing agreements than late-stage projects; and that lenient enforcement of non-cooperative product-market conduct after R&D joint ventures should depend on the stage of the R&D project. We propose a ‘market-size – synergy defense.’