downstream development unit, a buyer of the interin innovation, arise from its ability to prevent the upstream research unit from … over the mode of licensing of her interim knowledge, the controlling development unit is able to reduce the research unit …'s payoff selectively in such contingencies. This serves to incentivise the research unit to expend more effort ex ante, to …

We develop a model of two-stage cumulative research and development (Ramp;D), in which one Research Unit (RU) with an …