Maite Pastor and Joel Sandonís
"Research joint ventures vs. cross-licensing agreements: an agency approch"
JEL codes: O31, O32
Keywords: research joint ventures, cross-licensing agreements, moral hazard, incentive contracts, know-how
Abstract: In this paper two broad categories of organizing a cooperative R&D project are compared: a Research Joint Venture (RJV) and a Cross-Licensing Agreement (CLA). In a non-deterministic R&D setting including asymmetric information, we show that an RJV is more efficient in providing incentives, it allows to capture existing synergies and facilities the dissemination of the partners' know-how, which is socially desirable. However, contrary to a CLA, an RJV faces the rsk of opportunistic behavior by the partners regarding the provision of their know-how to the venture, which could lead a CLA to perform more efficiently and, in some cases, this organization turns out to be superior.