Ho, Shirley Jin-Shien (1997) Asymmetric multistage models of R&D : technology adoption, contracts and protection. PhD thesis, University of Warwick.

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Abstract

This thesis consists of three individual models on technology adoption, contracts and protection. The first model is motivated by the inconsistency between empirical results and theoretical models regarding the firm size effects upon the timing of adoption. By proposing a two-stage, endogenous learning, Stackelberg model, we conclude that in a pure strategy equilibrium, the large firm may or may not tacitly delay its adoption to capture the information advantage, depending on cost and belief parameters. The welfare analysis provides a justification for government interventions in firms’ adoption decisions.

The second model is motivated by the fact that although more and more resources have been devoted to R&D activities, there is little theoretical discussion regarding R&D funding issues. Chapter 3 derives the optimal funding contract, which happens to be a cost-plus-fixed-fee contract in the literature. After considering the adverse selection problem, the optimal contract induces no efficiency loss under both discrete and continuous settings and the principal will be more conservative in funding. The optimal auction maintains both allocation and production efficiency, and bidding the principal’s reservation price will be a dominant strategy in a second price auction. Neither the revenue equivalence nor the separation property will hold. With symmetric beliefs, the optimal funding length is shorter than that of contractible effort. Under some assumptions, the lock-in effect persists and the principal will prefer short-term contracts to long-term contracts.

The third model decides the optimal protection forms, protection rates and protection lengths under various cost and revenue circumstances. Since the incentive scheme will be affected by the target firm’s future profits, we show that in the context of incomplete information, screening protection schemes can sometimes coincide with the efficient schemes. In R&D area, our result suggests that optimal patent length need not necessarily be increasing in firm’s investment efficiency.

Item Type:	Thesis or Dissertation (PhD)
Subjects:	H Social Sciences > HB Economic Theory
Library of Congress Subject Headings (LCSH):	Research, Industrial -- Economic aspects, Technological innovations -- Economic aspects, Research and development contracts -- Economic aspects
Official Date:	November 1997
Dates:	Date Event November 1997 Submitted
Institution:	University of Warwick
Theses Department:	Department of Economics
Thesis Type:	PhD
Publication Status:	Unpublished
Supervisor(s)/Advisor:	Thomas, Jonathan P.
Sponsors:	China. Jiao yu bu
Format of File:	pdf
Extent:	iv, 183 leaves : illustrations, charts
Language:	eng

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