Paper Title:
Mechanism Design for R&D Outsourcing with Double-Sided Moral Hazard and Double-Sided Adverse Selection
  Abstract

It is studied that how to use profit sharing arrangement as an incentive mechanism to stimulate both parties of R&D outsourcing to reveal their private information and commit enough R&D resources or efforts. First, it is proved that the double-sided moral hazard in R&D outsourcing can not be totally prevented under traditional profit-sharing arrangement, namely, fixed, proportional or mixed profit-sharing arrangement. And a new mixed profit sharing arrangement is proposed, which is composed of a fixed transfer payment and allocation proportion, and proved to be able to prevent the double-sided moral hazard, and motivate both parties to reveal their private information and commit enough efforts.

  Info
Periodical
Advanced Materials Research (Volumes 204-210)
Edited by
Helen Zhang, Gang Shen and David Jin
Pages
1569-1574
DOI
10.4028/www.scientific.net/AMR.204-210.1569
Citation
X. Ding, W. D. Meng, B. Huang, F. M. Tao, "Mechanism Design for R&D Outsourcing with Double-Sided Moral Hazard and Double-Sided Adverse Selection", Advanced Materials Research, Vols. 204-210, pp. 1569-1574, 2011
Online since
February 2011
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Price
$32.00
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