Contractibility and Contract Design in Strategic Alliances *

  title={Contractibility and Contract Design in Strategic Alliances *},
  author={Josh Lerner},
The widespread use of strategic alliances between pharmaceutical and biotechnology companies is puzzling, since it is hard to contract on the exact nature of the research activities. A major concern of pharmaceutical companies entering strategic alliances is that the biotechnology firm will use the pharmaceutical company’s funds to subsidize other projects or substitute one project for another. Using a new data set on 584 biotechnology strategic alliance contracts, we find that the parties… CONTINUE READING


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