Design on the Incentive Contract of University Achievements Commercialization Offices Based on Principal-Agent Theory

Meifang Li, Yongxiang Zhao, Feng Shi

.

DOI: 10.4236/jssm.2010.31009                

Abstract

Based on principal-agent theory, an incentive contract model of university achievements commercialization offices (UACO) was constructed in this paper, and an optimal incentive contract between university and UACO was researched into. The conclusion indicates that many factors, such as working ability, working willingness, risk aversion degree of UACO, as well as the outside uncertain factors and so on, have important influences on the contract design. The efficiency of commercialization of university inventions has a squared forward growth relation with working ability, a direct proportion with working willingness, and has an inverse proportion with risk aversion degree of UACO and with outside uncertainty. Additionally, the level of hard working of UACO under the condition of information asymmetry is strictly less than that of information symmetry.

Keywords

University Achievements Commercialization Offices (UACO), Achievements Commercialization, Principal-agent, Incentive Contract

Conflicts of Interest

The authors declare no conflicts of interest.

References

[1]	C. M. Leitch and R. T. Harrison, “Maximising the potential of university spin-outs: The development of second- order commercialization activities,” R&D Management, Vol. 35, No. 3, pp. 257–272, 2005.
[2]	C. O'Gorman, O. Byrne, and D. Pandya, “How scientists commercialize new knowledge via entrepreneurship,” Journal of Technology Transfer, Vol. 1, pp. 23–43, 2008.
[3]	D. S. Siegel, D. A. Waldman, L. E. Atwater and A. N. Link, “Toward a model of the effective transfer of scientific knowledge from academicians to practitioners: Qua- litative evidence from the commercialization of university technologies,” Journal of Engineering and Technology Management, Vol. 21, No. 2, pp. 115–142, 2004.
[4]	P. M. Swamidass and V. Vulasa, “Why university inventions rarely produce income? Bottlenecks in university technology transfer,” Journal of Technology Transfer, Vol. 34, No. 4, pp. 343–363, 2009.
[5]	W. Chapple, A. Lockett, D. Siegel, and M. Wright, “Assessing the relative performance of UK university technology transfer offices: Parametric and non-parametric evidence,” Research Policy, Vol. 34, No. 3, pp. 369–384, 2005.
[6]	G. D. Markman, P. T. Gianiodis, and P. H. Phan, “Supply-side innovation and technology commercialization,” Journal of Management Studies, Vol. 46, No. 4, pp. 625– 649, 2009.
[7]	W. Zhang, “Game theory and information economics,” Shanghai, Shanghai People's Publishing House (in Chinese), pp. 238–239, 2004.
[8]	S. Xie, “Economic game theory,” Shanghai, Fudan University Press (in Chinese), pp. 137–139, 2002.
[9]	J. Mirrlees, “The optimal structure of authority and incentives within an organization,” Bell Journal of Economics, Vol. 7, No. 8, pp. 105–131, 1976.
[10]	B. Holmstrom, “Moral hazard and observability,” Bell Journal of Economics, Vol. 10, No. 12, pp. 74–91, 1979.
[11]	X. Huang, X. Tao, and W. Xing, “Design of energy saving contract based on principal-agent theory,” Industrial Engineering Journal (in Chinese), Vol. 12, No. 4, pp. 19–22, 2009.
[12]	J. Mirrlees, “Notes on welfare economics, information and uncertainty,” In Essays on Economic Behavior under Uncertainty, edited by M. Balch, D. McFadden and S. Y. Wu, Amsterdam: North-Holland, 1974.