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We analyze optimal contractual arrangements in a bilateral R and D partnership between a risk-averse provider that … conducts early-stage research, followed by a regulatory verification stage, and a risk-neutral client that performs late … inherent incentive alignment problems of double-sided moral hazard, risk aversion and holdup. We compare the efficacy of …
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The probability that actors in economic relationships break rules increases with the profits they thus expect to earn. It decreases with the probability and level of short- and long-term losses resulting from disclosure. It also decreases with the level of social context factors and intrinsic...
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