This paper considers the role of equity transfer to strategic alliance partners in mitigating the moral-hazard problem that occurs if a participating firm faces some possibility of reallocating a part of the resources devoted to the joint project of the strategic alliance or retreating from the...

This paper provides new evidence on the contractual governance of technology licensing agreements. Using an international sample of licensing contracts, we explore how contracts are designed to deal with specific contractual risks. In particular, we comparatively assess the influences of...

Recent surveys and casual observation suggest that higher levels of asset specificity need not always lead to vertical integration, as traditionally stressed by transaction-cost economics. This paper uncovers some of the factors driving firms to (sometimes) choose to remain separated in the...

Recent evidence from the field (Hossain and List, 2009) suggests that contracts framed in terms of a loss (a deduction is taken for failing to meet a threshold) lead to greater effort than contracts framed in terms of a gain (a bonus is given for meeting a threshold). We investigate two...

Previous work on the regulation of termination clauses in franchise contracts has ignored the ability of parties to contract around state law. Using data on two national fast-food restaurants, we find that Washington, D.C.'s termination restriction which did not restrict choice-of-law provisions...

Usually public monopoly firms have the task of providing services while covering costs with the revenue from charges paid by users. From the literature it is known that if users take the charge as given, the zero-profit constraint of the public firm results in an inefficient allocation of...

The decision to cooperate within R&D joint ventures is often based on expert advice. Such advice typically originates in a due-diligence process, which assesses the R&D joint venture's profitability, for example, by appraising the achievability of synergies. We show that if the experts who...

We analyze the role of liability, insurance, and side payments for independent safety controls with unobservable care levels. By independent safety controls we mean that the accident probability depends on the care levels of two parties, and that the effects of the controls on the accident...

Recent empirical research has established what many assumed - few people read form contracts. This research employs an online experimental design to fill gaps in the literature by asking two important questions: (1) To what extent does information about the exchange beyond the contract...

Disclosure has long been the preferred regulatory approach to prevent one-sided standard-form contract terms, but its efficacy is unclear. For disclosure to be effective, it must increase readership of contracts and, conditional on reading, affect decisions. I use clickstream data on software...