Knowledge as a public good: efficient sharing and incentives for development effort

We consider Research-Development joint ventures where adverse selection ari ses in knowledge sharing, while there is moral hazard involved in the choic e of private development efforts aimed at translating privately acquired an d/or shared knowledge into valuable marketable innovations. We extend earli er work by Bhattacharya et al. [Bhattacharya, S., Glazer, J., Sappington, D ., 1992. Licensing and the Sharing of Knowledge in Research Joint Ventures, J. Econ. Theory, Vol. 56, pp. 43-69.] to situations where one cannot ident ify a 'most knowledgeable' partner, by giving conditions under which there exist transfers implementing both efficient first best knowledge sharing an d subsequent development efforts. (C) 1998 Elsevier Science S.A. All rights reserved.