Technology Clubs: Efficient Pricing in Business-University Collaborations

Recently, business-university collaborations have become the subject of much interest. It is important to distinguish between `blue-sky` research and more directly commercially applicable research. This paper provides a framework in which to think about the latter. A simple screening model is proposed to study the ways in which a university might sell its research to the private sector. It demonstrates that `technology clubs`, where firms pay a fixed fee to join and a relatively low marginal cost for each piece of research, would increase the amount of research commercially developed and would be beneficial to all parties.