Bundling Negotiations: An Efficiency Rationale for Multiproject Contact

39 Pages Posted: 16 Oct 2000

See all articles by Christopher M. Snyder

Christopher M. Snyder

Dartmouth College - Department of Economics

Nicholas Vonortas

George Washington University - Department of Economics; National Research University Higher School of Economics

Date Written: May 10, 2000

Abstract

Using a database of all research joint ventures registered in the U.S., we document the pervasiveness of multiproject contact, defined as pairs of firms engaging in several research joint ventures together. In contrast to the anticompetitive view prevailing in the literature, we develop a model providing an efficiency rationale for multiproject contact. Each project involves decisions which are the subject of negotiations among participants. The inefficiency associated with bargaining under asymmetric information can be mitigated if negotiations are bundled, i.e., negotiations over several projects are conducted jointly. Our analysis of the benefits of bundling negotiations is cast in terms familiar from the literature on bundling by a multiproduct monopolist.

JEL Classification: C78, O32, L15

Suggested Citation

Snyder, Christopher M. and Vonortas, Nicholas, Bundling Negotiations: An Efficiency Rationale for Multiproject Contact (May 10, 2000). Available at SSRN: https://ssrn.com/abstract=241930 or http://dx.doi.org/10.2139/ssrn.241930

Christopher M. Snyder (Contact Author)

Dartmouth College - Department of Economics ( email )

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HOME PAGE: http://www.dartmouth.edu/~csnyder/

Nicholas Vonortas

George Washington University - Department of Economics ( email )

2201 G Street NW
Center for Int'l. Science and Technology Policy
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United States
(202) 994-6458 (Phone)
(202) 994-1639 (Fax)

National Research University Higher School of Economics

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Moscow, Moscow 119017
Russia

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