Date of Award

5-2009

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Legacy Department

Economics

Advisor

Maloney, Michael T

Committee Member

Tollison , Robert

Committee Member

Sauer , Raymond

Committee Member

Warner , John

Abstract

ABSTRACT
This paper empirically analyzes how circumstances affect the creation of strategic alliances in the pharmaceutical industry, and the form these alliances take. The models introduced in this paper use the cost of capital and monitoring costs to predict the timing of the deal, which in turn allows the prediction of the deal type. The deal type is then used to predict payment types used in the deal. Deals are characterized by five payment types; upfront, royalty, milestone, equity, and research payments. Deals are also characterized by one of five deal types; co-development, license, acquisition, outsource, and asset purchase. Each of these is a response to a specific contracting problem such as cost of acquiring capital and asymmetric information. The payment types used in pharmaceutical alliances are chosen to efficiently produce monitoring or purchase assets in the face of asymmetric information and to maximize firm profits.

Included in

Economics Commons

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