CaltechAUTHORS
  A Caltech Library Service

A Dynamic Model of Research Contracting

Balbien, Joel and Wilde, Louis L. (1982) A Dynamic Model of Research Contracting. Bell Journal of Economics, 13 (1). pp. 107-119. ISSN 0361-915X. http://resolver.caltech.edu/CaltechAUTHORS:20171117-155905262

[img] PDF - Published Version
Restricted to Caltech community only
See Usage Policy.

308Kb

Use this Persistent URL to link to this item: http://resolver.caltech.edu/CaltechAUTHORS:20171117-155905262

Abstract

This article analyzes the behavior of a single firm that is engaged in R&D for a "sponsor." We show that contractual forms that provide good incentives in a static environment may introduce incentive problems in a dynamic setting. More specifically, we show that a firm engaged in a sequence of R&D contracts is more likely to do research: (1) the lower are the costs of R&D, (2) the better is the state of sponsor knowledge, and (3) the longer is the sequence of contracts (given an appropriately high discount factor). We also show that the firm reveals a larger share of its results: (1) the better is the state of sponsor knowledge, (2) the better is the state of private knowledge possessed by the firm, and (3) the shorter is the sequence of contracts.


Item Type:Article
Related URLs:
URLURL TypeDescription
http://dx.doi.org/10.2307/3003433DOIArticle
http://www.jstor.org/stable/3003433JSTORArticle
http://resolver.caltech.edu/CaltechAUTHORS:20171009-153943053Related ItemWorking Paper
Alternate Title:A Formal Model of Government Sponsored Research (with Applications to Solar Power Systems)
Additional Information:© 1982 RAND Corporation. This research was sponsored by the Jet Propulsion Laboratory under Department of Energy funding from the Solar Thermal Parabolic Dish Program. The views expressed reflect those of the authors only. We would like to thank Steve Lippman and Bill Rogerson for helpful comments on an earlier draft. The editors of this journal and its referees also provided useful suggestions. Formerly SSWP 339, originally titled: A Formal Model of Government Sponsored Research (with Applications to Solar Power Systems).
Funders:
Funding AgencyGrant Number
JPLUNSPECIFIED
Department of Energy (DOE)UNSPECIFIED
Solar Thermal Parabolic Dish ProgramUNSPECIFIED
Subject Keywords:Unit costs, Contract incentives, Economic models, Risk aversion, Modeling, Technology, Logical proofs, Economic research, Dynamic modeling, Technological innovation
Record Number:CaltechAUTHORS:20171117-155905262
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20171117-155905262
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:83319
Collection:CaltechAUTHORS
Deposited By: Jacquelyn Bussone
Deposited On:18 Nov 2017 00:29
Last Modified:18 Nov 2017 01:47

Repository Staff Only: item control page