蝌蚪网

This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. 蝌蚪网
  3. 蝌蚪网 Journal: Microeconomics
  4. Forthcoming Articles
  5. The Organization of Innovation: Incomplete Contracts and the Outsourcing Decision

蝌蚪网 Journal:
Microeconomics

ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)

The Organization of Innovation: Incomplete Contracts and the Outsourcing Decision

  • Thomas Jungbauer
  • Sean Nicholson
  • June Pan
  • Michael Waldman
  • Lucy Xiaolu Wang
蝌蚪网 Journal: Microeconomics (Forthcoming)

Abstract

Why do firms outsource research and development (R&D) for some products while conduct- ing R&D in-house for similar ones? An innovating firm risks cannibalizing its existing products. The more profitable these products, the more the firm wants to limit cannibalization. We ap- ply this logic to the organization of R&D by introducing a novel theoretical model in which developing in-house provides the firm more control over the new product's location in product space. An empirical analysis of our testable predictions using pharmaceutical data concerning patents, patent expiration, and outsourcing at various stages of the R&D process supports our theoretical approach.

Downloads