MANAGING R&D IN VERTICAL RELATIONSHIPS.
We study the optimal strategy for research and development (R&D) in a buyer‐supplier relationship. The buyer chooses whether to (1) insource a cost‐reducing R&D to its own research‐subunit or to (2) outsource it to its manufacturing supplier. The buyer cannot observe the R&D effort in either case, b...
| Publicado en: | Economic Inquiry Vol. 57; no. 3; pp. 1510 - 1526 |
|---|---|
| Autores principales: | , |
| Formato: | Artículo |
| Publicado: |
Wiley-Blackwell
Jul2019
|
| Materias: | |
| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=136579404&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 136579404 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00952583 EIQ jtl: Economic Inquiry issn: 00952583 maglogo: Y pubinfo: dt: Jul2019 vid: 57 iid: 3 pid: 480 pub: Wiley-Blackwell artinfo: ui: 136579404 10.1111/ecin.12784 ppf: 1510 ppct: 16 formats: fmt: – @attributes: type: T – @attributes: type: C – @attributes: type: P size: 366KB tig: atl: MANAGING R&D IN VERTICAL RELATIONSHIPS. aug: au: Dai, Chifeng Shin, Dongsoo affil: Department of Economics, Southern Illinois University Carbondale, Carbondale IL, 62901 Department of Economics, Leavey School of Business, Santa Clara University, Santa Clara CA, 95053 su: Information asymmetry Research & development Industrial procurement Suppliers Cost control sug: subj: Information asymmetry Research and Development in Biotechnology Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology) Research & development Industrial procurement Suppliers Cost control ab: We study the optimal strategy for research and development (R&D) in a buyer‐supplier relationship. The buyer chooses whether to (1) insource a cost‐reducing R&D to its own research‐subunit or to (2) outsource it to its manufacturing supplier. The buyer cannot observe the R&D effort in either case, but can better observe the R&D result when the R&D is conducted internally. According to our analysis, the buyer prefers insourcing R&D to mitigate information asymmetry when the R&D cost is either small or large. When the R&D cost is intermediate, however, the buyer prefers outsourcing R&D, and can achieve the full information outcome (first‐best outcome) despite the information asymmetry associated with outsourcing R&D. Moreover, the buyer's preference for outsourcing high‐cost R&D increases when the R&D is more likely to succeed or to generate significant cost reductions, or the R&D result is more difficult to predict. Our analysis provides a theoretical explanation for the increasing trend of outsourcing innovation to manufacturing suppliers. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
|---|