Empirical studies of technology and alliance contracts

The dissertation explores several aspects of contracting for new technologies. It consists of four chapters, each of which is a distinct empirical study. Chapters 1 and 2 are based upon an in-depth exploration of the structure of alliance contracts written between Internet portals and partner firms between 1995 and 1999. Chapters 3 and 4 examine the licensing and commercialization of faculty inventions at Harvard University between 1979 and 2003. I briefly summarize each chapter below:; Chapter 1 examines the allocation of ownership and control rights in alliances between Internet portals and their partner firms. The setting---a rapidly growing industry in its earliest stage---suggests viewing these alliances as incomplete contracts. Empirically, the division of ownership and the allocation of control rights are shown to be consistent with the incomplete contracting literature. Chapter 2 analyzes the use of exclusivity and state-contingent decision rights in portal alliances. The empirical results are consistent with the literature on information and control in alliances. This literature suggests that the allocation of state-contingent decision rights may be influenced by firms' desires to signal quality and that the allocation of these rights depends on the level of information asymmetry between the two parties and on the precision of the verifiable performance measures. The hypotheses regarding exclusivity commonly put forth by the technology licensing literature receive some limited empirical support. Together, Chapter 1 and 2 suggest extending the Grossman-Hart-Moore property rights model to include additional factors such as control rights.; Chapter 3 addresses the impact of contract structure on ex post performance of technology licenses. In a setting characterized by verifiable ex post performance measures, contingent payments generate disincentives for licensees to develop a technology by decreasing their payoffs but may induce licensor-inventors to supply non-contractible effort thereby improving the likelihood of success. Empirically, both types of incentives are shown to have some importance in licenses for early-stage technologies.; Chapter 4 explores the question of why buyers are found for some university technologies and not for others. The role of technology characteristics, inventor characteristics, intellectual property protection and other institutional characteristics are explored.