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Full-Text Articles in Business
Asymmetric Information Of Product Authenticity On C2c E-Commerce Platforms: How Can Inspection Services Help?, Linqiu Li, Xin Fang, Yun Fong Lim
Asymmetric Information Of Product Authenticity On C2c E-Commerce Platforms: How Can Inspection Services Help?, Linqiu Li, Xin Fang, Yun Fong Lim
Research Collection Lee Kong Chian School Of Business
Problem definition: We consider a customer-to-customer (C2C) platform that provides an inspection service. Uncertain about his product’s authenticity, a seller sells his product through the platform. Before purchasing, a buyer obtains a signal of the product authenticity from the product’s price set by the seller. The platform’s inspection service can detect a counterfeit with a probability. If the product passes the inspection, the platform sends it to the buyer and charges the seller a commission fee. Otherwise, the platform returns it to the seller and charges the seller a penalty fee. Methodology/results: We develop a two-stage game-theoretical model. In the …
Turning The Tables In Research And Development Licensing Contracts, Niyazi Taneri, Pascale Crama
Turning The Tables In Research And Development Licensing Contracts, Niyazi Taneri, Pascale Crama
Research Collection Lee Kong Chian School Of Business
Research and development (R&D) collaborations between an innovator and her partner are often undertaken when neither party can bring the product to market individually, which precludes value creation without a joint effort. Yet, the uncertain nature of R&D complicates the monitoring of effort, and the resulting moral hazard reduces a collaboration’s value. Either party can avoid this outcome by acquiring the capability that is missing and then taking sole ownership of the project. That approach involves two types of risks: one related to whether the other party’s capability will be acquired and one related to how well it will be …
Inducing Compliance With Postmarket Studies For Drugs Under Fda's Accelerated Approval Pathway, Liang Xu, Hui Zhao, Nicholas C. Petruzzi
Inducing Compliance With Postmarket Studies For Drugs Under Fda's Accelerated Approval Pathway, Liang Xu, Hui Zhao, Nicholas C. Petruzzi
Research Collection Lee Kong Chian School Of Business
Problem definition: In 1992, the Food and Drug Administration (FDA) instituted the accelerated approval pathway (AP) to allow promising drugs to enter the market based on limited evidence of efficacy, thereby permitting manufacturers to verify true clinical benefits through postmarket studies. However, most postmarket studies have not been completed as promised. We address this noncompliance problem. Academic/practical relevance: The prevalence of this noncompliance problem poses considerable public health risk, thus compromising the original purpose of a well-intentioned AP initiative. We provide an internally consistent and implementable solution to the problem through a comprehensive analysis of the myriad complicating factors and …
Contract Theory: Impact On Biopharmaceutical Alliance Structure And Performance, Niyazi Taneri, Arnoud De Meyer
Contract Theory: Impact On Biopharmaceutical Alliance Structure And Performance, Niyazi Taneri, Arnoud De Meyer
Research Collection Lee Kong Chian School Of Business
Alliances for new product development have been studied extensively in the operations management literature. Alliances between an innovator and a partner create value by utilizing their complementary capabilities. In this paper, we seek to understand what drives the alliance structure: the choice between collaborative alliances where the parties exert joint efforts and sequential alliances where, for the most part, the partner takes over going forward. Our analysis of a data set of over 2,000 biopharmaceutical alliances reveals our main finding: a key role of operational choices is to address contract theoretic concerns faced by an alliance.We also find that aligning …
Step By Step: The Benefits Of Stage-Based R&D Licensing Contracts, Pascale Crama, Bert De Reyck, Zeger Degraeve
Step By Step: The Benefits Of Stage-Based R&D Licensing Contracts, Pascale Crama, Bert De Reyck, Zeger Degraeve
Research Collection Lee Kong Chian School Of Business
We examine how a licensor can optimally design licensing contracts for multi-phase R&D projects when he does not know the licensee’s project valuation, leading to adverse selection, and cannot enforce the licensee’s effort level, resulting in moral hazard. We focus on the effect of the phased nature typical of such projects, and compare single-phase and multi-phase contracts. We determine the optimal values for the upfront payment, milestone payments and royalties, and the optimal timing for outlicensing. Including multiple milestones and accompanying payments can be an effective way of discriminating between licensees holding different valuations, without having to manipulate the royalty …