Agriculture Reference
In-Depth Information
irm's. corporate. incentives.. One. critical. risk. is. the. potential. co-opting. of. the.
academic.research.agenda.by.private.interests..University.researchers.risk.the loss.
of. academic. freedom. and. integrity. while. industry. risks. the. loss. of. investment.
capital,.privacy,.and.proprietary.information..Differences.between.the.university's.
educational.objectives.and.the.private.sector's.goals,.as.well.as.differences.in.the.
cultures,. institutional. incentives,. and. time. frames,. can. lead. to. a. clash. of. values..
Intellectual. property. (IP). rights. issues. are. also. a. frequent. source. of. contention..
Given.these.risks,.partnerships.must.be.based.on.carefully.structured.contracts.to.
protect.the.interests.of.the.private.and.public.partners.
Though.there.has.been.much.discussion.of.public-private.research.partnerships.
in. both. the. popular. press. and. academic. community,. there. is. no. consensus. on. the.
optimal.contract.structure.for.these.partnerships..We.have.developed.a.three-stage.
framework.for.evaluating.PPP.contracts..This.framework.is.unique.because.it.takes.
into. account. the. type. of. economic. good. the. partnership. produces. as. well. as. the.
incomplete. nature. of. contracts. that. deal. with. sponsored. research.. Partnerships. in.
horticultural. research. deal. with. the. management. and. provision. of. impure. public.
goods.*.The.optimal.structure.of.a.PPP.depends.on.the.degree.of.impurity,.and,.if.
a.PPP.produces.a.good.that.is.impure.to.some.extent,.its.contract.should.differ.from.
that.of.a.PPP.that.produces.a.purely.private.good..The.contracts.that.govern.these.
partnerships. and. assign. ownership. of. the. impure. goods. they. produce. are. incom-
plete. in. the. sense. that. there. is. a. set. of. events. that. can. inluence. the. partnership,.
which. cannot. be. enumerated. in. the. contract.. These. events. could. be. unanticipated.
research.opportunities.that.arise.during.the.research.process.or.could.be.an. unex-
pected.discovery.that.falls.outside.of.the.contract's.scope..An.optimal.contract.will.
take.into.account.the.uncertainty.inherent.in.the.research.process.and.assign.control.
in.the.case.of.unanticipated.events.in.a.manner.that.does.not.pervert.the.partner's.
incentives.
Contracts.for.PPPs.in.horticultural.research.and.their.associated.control.and.prop-
erty. rights. come. in. many. forms,. ranging. from. large,. multiproject,. multiyear. alli-
ances.to.small-scale.projects..Our.three-stage.framework.to.analyze.these.contracts.
is.based.on.the.contractual.assignment.of.control.in.the.case.of.unanticipated.events..
In.Stage.1,.the.public.and.private.partners.negotiate.to.determine.the.allocation.of.
the.front-end.control.rights.and.the.back-end.property.rights.
†
.The.front-end.control.
rights. determine. the. nature. and. scope. of. the. research. activities. that. the. partner-
ship.will.undertake.as.well.as.decision-making.authority.over.those.activities.while.
back-end.property.rights.determine.how.any.beneits.generated.by.the.research.will.
be. distributed. among. the. partners.. The. partners. also. make. relationship-speciic.
investments. according. to. the. contract. in. Stage. 1.. In. Stage. 2,. the. partners. bargain.
over.management.decisions.with.bargaining.power.determined.by.the.contract.rights.
*
.
Impure. public. goods. are. goods. that. are. either. nonrival. or. nonexcludable.. A. nonrival. good. can. be.
consumed. by. one. person. without. preventing. simultaneous. consumption. by. others. (e.g.,. intellectual.
property)..A.good.is.nonexcludable.if.it.is.not.possible.to.prevent.anyone.from.consuming.the.good.
(e.g.,.a.lighthouse).
†.
In.this.chapter,.we.will.use.control.rights.to.refer.to.the.authority.to.make.decisions.during.the.research.
process. (the.“front-end”). and. property.rights. to. refer. to. ownership. of. the. research. produced. by. the.
partnership.(the.“back-end”).
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