An alliance timing game under real options in biopharmaceutical industry

The importance of alliances in firm capital structure decisions: evidence form biotechnology firms

Building on finance research, we argue that the ex post hazards arising from alliance formation depend upon the firm’s financial condition. Financial distress jeopardizes the continuity of an alliance and the value of the investments involved. Thus, firms should reduce leverage to signal continued commitment and to induce investments from alliance partners. Accordingly, we find that a firm’s current alliance propensity predicts its subsequent capital structure decisions and that this relationship is most pronounced in the presence of other exchange hazards. Our paper contributes to alliance research and to the growing literature discussing the strategic consequences of capital structure.

A real options game of alliance timing decisions in biopharmaceutical research and development

Abstract In this article we examine the alliance timing trade-off facing both pharmaceutical and biotech firms in a stochastic and competitive environment. Specifically, we introduce a real options game (ROG), where a pharmaceutical company can choose between two competing biotech firms by sequentially offering a licensing deal early or late in the new drug development process. We find that, when the alliance raises the drug market value significantly, the agreement is signed late in the drug development process. This suggests that the postponement effect implied by the use of real options prevails over the biotech firms’ competition effect, which would instead play in favor of an early agr…

The impact of partners’ financial condition on alliance contract design: evidence from biotech-pharma alliances

An Open Innovation Decision Support System to Select a Biopharmaceutical R&D Portfolio

Drugs available in the market today, selected several years ago under very uncertain future scenario, have experienced a long and expensive process of research and development carried out following both a closed and an open innovation path. To support this critical selection process, we propose a Decision Support System, able to choose among different candidates the most promising drugs along their best development path. The Decision Support System, based on a real options portfolio optimization model, mapping tools, and what-if rules as well, has been applied to a numerical example available in literature, and the research findings show interesting managerial and academic implications. Cop…

Negotiation models in manufacturing e-marketplaces

This chapter describes the negotiation model adopted by the Customer and Supplier Negotiation Agents in the agent based architecture described in Chapter 2. The chapter is structured as it follows: in the first section the use of automated negotiation in modern market scenario is motivated; in the second section, starting form the contributions presented in the scientific literature, automated negotiation will be analysed and a taxonomy will be proposed. The third section is dedicated to the e-market context discussed in this book and in particular the impact of negotiation in manufacturing e-marketplaces will be stressed: its impact is strictly related to the electronic nature of e-marketp…

Inter-firm relationship design for achieving supply network responsiveness

A real options based support system to open innovation

Pharmaceutical R&D process (PR&DP) has been deeply investigated by different streams of literature; the interest is due to the strategic implication of the related decisions undertaken. The PR&DP has been revolutionised by the biotech advent and as a consequence R&D managers cannot avoid to consider Open Innovation paradigm during this decision process. Starting from a Real Option optimization model available in literature, the paper aims at proposing a decision support system (DSS) able to suggest the candidate products to be included in the best R&D portfolio varying input parameters (resilient products), to provide a products Pareto analysis that aims at individuating the products for wh…

Fostering SMEs networking through Business Ecosystem and ICT

Real Options Analysis (ROA)opens innovation: the biopharmaceutical case

Coalition protocols in manufacturing e-marketplaces: creating and measuring the competitive advantage

Evaluating multi-lateral negotiation policies in manufacturing e-marketplace

Risky choices in strategic environments: An experimental investigation of a real options game

Managers frequently make decisions under conditions of fundamental uncertainty due the stochastic nature of the outcomes and competitive rivalry. In this study, we experimentally test a theoretical model under fundamental uncertainty and competitive rivalry by designing a sequential interaction game between two players. The first mover can decide either to choose a sure outcome that assigns a risky outcome to the second mover or to pass the decision to the second mover. If the second player gets the chance to decide, she can choose between a sure outcome, conditioned by the assignment of a risky payoff to the first mover, or the sharing of the risky outcome with the first mover. We then int…

Current research issues in production economics

This Special Issue includes a selection of papers originally presented and discussed at the Twentieth International Working Seminar on Pro- duction and Operations Management, Innsbruck, February 19–23, 2018, and subsequently extended and improved. Production and Operations Management was established in the1970s as an academic discipline focusing on scientific topics treating the interface between engineering, management, and economics with a special emphasis on financial consequences of decisions in the produc- tion domain. The subject is interdisciplinary in nature and it therefore contains a wide range of topics. The Working Seminar included sessions such as supply chain management, innov…

Biopharmaceutical alliances and competition: a real options game approach

The effect of early or late R&D inbound alliance on innovation

In the research-and-development (R&D) supply chain, firms can agree an inbound alliance at different times along the R&D process; this decision affects the supplier's effort and the innovation that firms achieve at the end of the agreement. Because the supplier's effort is not entirely observable, firms cannot enforce effort contractually. Early contracts demand greater effort and offer risk-sharing opportunities; in late contracts suppliers have a stronger ex-ante bargaining-power position because of the shorter (and less risky) contract length and the experience suppliers already have. This study argues that later inbound alliances allow a higher innovation value when both partner…

The effect of reshoring announcement on company share price

The reshoring trend has gained momentum among manufacturing companies, which increasingly decide to relocate their production activities back to their home country. In this article, we explore the relationship between the motivations guiding the decision to reshore and the companies’ shareholder value. Particularly, taking an eclectic paradigm perspective, we aim to understand whether the motivations driving the companies’ decisions to reshore explain changes in the shareholder value. Empirically, we built an ad-hoc database based on 370 reshoring decisions involving the USA as a reshoring destination and announced in the 10-year time window ranging from 2009 to 2018. Our results highlight…

How risk considerations can affect inter-organization relationship decisions

The new trends in inter-organization relationships push towards network solutions: companies are interested in relationships with partners and customers to overcome resource dependence, enter too risky market or simply differentiate their business portfolio. The present study focuses on network organization aiming at highlighting threats and opportunities to investigate the double nature of the risk concept. In literature the risk concept is often associated to the amount and probability of business losses and the effort is on manage the risk at operative level. In this paper the risk is evaluated in pair with the opportunities is brought in and the risk management is tackled both at strate…

Governance forms drivers in bio-pharmaceutial inter-firm relationships

Networking benefits are acknowledged by many studies in the industrial organization and strategic management fields; transaction cost theory agency and property right theory provide the economic foundations to the market-hierarchy dilemma; while Resource based-view (RBV), relational and evolutionary theories provide the strategic foundation of the inter-firm relationships. All this theoretical strands investigate reasons that push firms to formalize their relationship in different governance structures. The bio-pharmaceutical industry has the characteristics to offer to the potential partners both exploitation or exploration alliances benefits. In particular some elements play a “pivot” rol…

Strategic alignment of business network forms and single companies’ objectives

In this paper the most significant theories on firm networking are reviewed and an innovative strategic perspective that underlies at firm network organization is proposed. It is argued that networks are differently organized according to three basic strategic objectives: gaining efficiency, collecting knowledge, pursuing globalization. The research is supported by secondary data analysis based on a sample of about 115 case studies published in different journals and magazines.

An Agent based architecture for added value services in manufacturing neutral e-marketplaces

Uncertain outcome presentations bias decisions: experimental evidence from Finland and Italy

Even in their everyday lives people are expected to make difficult decisions objectively and rationally, no matter how complex or uncertain the situation. In this research, we study how the format of presentation and the amount of presented information concerning risky events influence the decision-making process, and the propensity to take risk in decision makers. The results of an exploratory survey conducted in Finland and in Italy suggest that decision-making behavior changes according to the way the information is presented. We provide experimental evidence that different representations of expected outcomes create distinct cognitive biases and as a result affect the decisions made. Th…

Integrating ERP SYSTEMS IN VERTICAL SUPPLY CHAINS WITH NEGOTIATION TOOLS

Modulate research effort in inbound alliance

We address the R&D supply chain where a customer wants to sign an R&D contract with a supplier in an inbound open innovation style. Supplier has to decide how much effort put on contract: effort is assumed as nonobservable then it cannot be constrained contractually. We model the R&D process like a staged one, which allows for both an early contract and a late one. The overall committed effort depends on the alliance timing: earlier contracts will ask for a greater cumulated effort although they offer risk-sharing opportunity. On the other hand, later contracts see supplier with a stronger ex-ante bargaining power position, due to shorter (and then less risky) contract length and experience…

A real options based model to select a balanced R&D portfolio

The R&D process in the pharmaceutical industry has a long and dynamic life then it is an ideal field of application for ROA. Actually, ROA implementation, as widely demonstrated in literature, is narrowed to very limited cases because its perceived complexity. This research wants to suggest a simplified method, respect the ones available in literature, that could foster the use of ROA: we built up an integer linear programming model, based on a model available in literature, useful for selecting a balanced R&D portfolio from a set of candidate drugs. The model has been tested through a case study.

Drivers influencing the governance of inter-firm relationships in the biopharmaceutical industry: an empirical survey in the Italian context

This paper focuses on factors influencing the choice of the governance form in inter-firm relationships (IFRs) between pharmaceutical and biotechnology companies. By reviewing the relevant literature on transaction cost economics, property right theory, real option and resources-based view, we located some drivers that might influence such relationships and we formulated a set of hypotheses linking them to governance forms. Such a theoretical framework has been empirically tested through a survey conducted among the Italian companies associated to Farmindustria. Empirical results provide some interesting insights on how shaping bio-pharmaceutical deals; we found that the developmental stage…

Open innovation: A real option to restore value to the biopharmaceutical R&D

The pharmaceutical landscape has changed, and new business models, based on alliances, are increasingly being adopted in this industry. Biotechnology advances have pushed this development, and pooling complementary resources coming from incumbents and newcomers is a key skill to succeed: these are the premises for a quick spread of the open innovation (OI) paradigm in this industry. R&D portfolio selection needs R&D project evaluation, and Real Options Analysis (ROA) is acknowledged as a powerful tool to evaluate uncertain projects that have an intrinsic flexibility. The present research aims to foster the use of ROA in the OI field in order to encourage firms to undertake this innovation mode…

Capital structure decisions in the biotechnology industry: the role of R&D collaborations with pharmaceutical incumbents

This study focuses on the importance of collaborative R&D attitudes of biotech firms in the capital structure determination. Specifically, we investigate the short term impact of R&D agreements on financial leverage and we analyze whether this relationship depends on alliances’ features and the type and characteristics of the partners involved. Our results suggest that agreements with established pharmaceutical incumbents are followed by a reduction in the level of debt, while collaborations with biotech firms do not play a significant role, at least in the short term. However, different explanations are plausible. Our findings could be consistent with an “extension” of the pecking order th…

Strategic drivers influencing the governance of inter-firm relationships between biotechnology and pharmaceutical companies: an empirical survey

This paper investigates the drivers influencing the choice of the governance form in inter-firm relationships (IFRs) between pharmaceutical and biotech companies. By analyzing the relevant literature on the issue, we have located the main drivers that might influence such relationship and a set of hypotheses linking them to governance forms. Such theoretical framework has been empirically tested through a survey conducted among the companies associated to Farmindustria. The result of the empirical analysis provides some interesting insights on how shaping bio-pharmaceutical deals; we found that the developmental stage of the product object of the deal, the existence of previous collaboratio…

Shaping collaboration in new product development through negotiation and auctions

Public Policy and Italian Innovative Startups Financing: Evidences from Case Studies

Since more than two years innovative start up have been receiving in Italy great attention by the lawmaker; the aim is to sustain innovation ecosystem with spill-over effect on the whole economy. In this context financial sources availability plays a critical role; indeed new firms in general, and innovative more than others, complain the lack of capital to fuel their businesses. Heterogeneity of innovative start up makes very complex to address this issue and to target the goal. This research is a very first attempt to understand to what extent startup entrepreneurs have availed of the occasions offered by a recent Italian Law aiming to sustain innovative startups and what underpins their …

Negotiation in Distributed Production Planning Environments

Mass customization and global competition push enterprises to adopt proper business models able to capture all the opportunities arising from emerging competition rules. An increasing number of industrial enterprises distribute their production capacity world wide to achieve lower production costs, lower distribution costs (due to the closer proximity to customers), and deeper knowledge of customer needs. As a drawback, coordination of the different production plants and the balance among plants and enterprise goals represent a critical issue in the network management. In this context the paper looks at the production planning problem, adopting a traditional hierarchical time-based perspect…

Business networking strategy: operations management and organizational economics different perspectives

A bottom up approach to evaluate risk in network environment

Firms dependence on environment has been contended in various way one of the most suited is the collaboration among other firms in order to realize extra rents. Firm dependence on environment is particularly crucial in sector characterised by complex technology or complex product (product requiring an articulated supply chain) that make the market instable. In this scenario the alliance, whatever is the inter-organizational solution chosen, causes new forms of dependence that are the origins of network risks. In order to evaluate correctly the extra rents a long range perspective has to be assumed and a financial analysis has to be followed. To evaluate expected cash flows it needs to known…

The relationship between institutions and value creation in software development models

Purpose The purpose of this paper is to analyse the possibility for firms to consider institutional settings to systematically direct dispersed individual efforts of discovery and invention towards objects (products or processes) of their interest in order to enhance their value creation capacity. Design/methodology/approach The authors conduct a comparative analysis of the different institutional settings within which software products are invented and produced – closed producer-centred model, open user-centred model, and hybrid interactive producer-user model. Findings The authors draw indications regarding the possibility to design institutional settings for value creation and the poten…

The importance of relation-specific investments in capital structure decision: the case of the biopharmaceutical industry

According to capital structure literature, bilateral relationships with external partners have a strong impact on a firm’s financing decisions because they involve relation-specific investments that would lose most of their value in case of liquidation. By adjusting their capital structure firms can reduce liquidation risks and incentive their partners to undertake such investments. In this paper we extend these arguments to strategic alliances in the context of biotechnology industry, where bilateral relationships are formed to advance the commercialization of innovation and R-S investments are a primary issue. We investigate alliances heterogeneity and analyze whether partnerships possess…

Sharing economy and dynamic pricing: Is the impact of Airbnb on the hotel industry time-dependent?

Abstract Prior literature has reported significant price and revenue reductions in the hotel industry due to the emergence of Airbnb. Other studies have documented that hotels' price reactions to the penetration of Airbnb depend on their service level, e.g., low/medium-end versus high end. Relying on a large sample from the Italian market, we contribute by showing that the effect of Airbnb on hotels' price decisions does not only depend on incumbents’ quality level, but also on the difference between booking and check-in time. That is, the effect of the penetration of Airbnb on hotels' dynamic price decisions varies over time depending on the core segment hotels target.

Strategic Planning in Advanced Manufacturing Systems: a Decision Support System

This chapter presents an innovative approach for assisting entrepreneurs in making long term capacity decisions in Advanced Manufacturing Systems (AMSs). AMSs require high investment costs in manufacturing equipments, human resources and technology knowledge. Such high investments together with the wideness and the variability of the competition scenario contribute to increase the perception of the risk for industrial entrepreneurs especially in SMEs. This problem could be approached by providing the entrepreneur with a Decision Support System (DSS) able to assist her/him in making long term capacity decision in AMS. The DSS proposed in this chapter allows the entrepreneur to plan its produ…

"Alliance Portfolio Diversity, Organizational Slack, and Firm Financial Performance"

We investigate how the availability of slack influences a firm’s ability to deal with alliance portfolio diversity. Alliances with diverse partners provide access to a broader pool of complementary...

The Importance of Alliances in Firm Capital Structure Decisions: Evidence from Biotechnology Firms

Building on finance research, we argue that the ex post hazards arising from alliance formation depend upon the firm's financial condition. Financial distress jeopardizes the continuity of an alliance and the value of the investments involved. Thus, firms should reduce leverage to signal continued commitment and to induce investments from alliance partners. Accordingly, we find that a firm's current alliance propensity predicts its subsequent capital structure decisions and that this relationship is most pronounced in the presence of other exchange hazards. Our paper contributes to alliance research and to the growing literature discussing the strategic consequences of capital structure. Co…

Negotiation Models in Manufacturing E-Marketplaces

This chapter describes the negotiation model adopted by the Customer and Supplier Negotiation Agents in the agent based architecture described in Chapter 2. The chapter is structured as it follows: in the first section the use of automated negotiation in modern market scenario is motivated; in the second section, starting form the contributions presented in the scientific literature, automated negotiation will be analysed and a taxonomy will be proposed. The third section is dedicated to the e-market context discussed in this book and in particular the impact of negotiation in manufacturing e-marketplaces will be stressed: its impact is strictly related to the electronic nature of e-marketp…

Alliance portfolio diversity, organizational slack, and firm performance

In this paper we analyze whether and how the availability of internal resources in the form of slack influences a firm ability to deal with partner diversity in its alliance portfolio. Alliances with diverse partners provide access to a broader pool of complementary resources, but they also entail significant coordination costs. In this context, we argue that slack acts as a doubleedged sword that can either facilitate or hinder the management of interdependencies among different alliance projects. Accordingly, we further argue that the net impact of slack will depend on the firm’s experience in dealing with the challenges posed by portfolio diversity. Empirical analysis on a sample of firm…

The Management of Dental Practices in the Post-COVID 19 Era: An Economic and Operational Perspective

Background: In order to protect dental teams and their patients during the COVID-19 pandemic, dentists have had to adopt several measures (operating and post-operating procedures) which may increase the total treatment time and costs relating to individual protective measures. This paper will propose a thorough analysis of operating dentistry procedures, comparing the economic performance of the activity in a dental surgery before and after the adoption of these protective measures, which are required to contain the risk of SARS-COV-2 infections. Methods: The economic analysis is articulated in three approaches. Firstly, it assesses a reduction in markup by maintaining current charges (A)

How risk influences the choice of governance mode in biopharmaceutical inter-firm relationships

Abstract This paper proposes a new theoretical framework for assessing the influence of risk in shaping the governance form in biopharmaceutical inter-firm relationships. In particular, we propose a multidimensional operationalization of relational and performance risk and, by following Transaction Cost Economics (TCE) and Real Options (RO) theory constructs, we hypothesize a relation between the aforementioned risk components and the choice of governance form. Specifically, following TCE reasoning, we hypothesize that a high level of relational risk leads towards more hierarchical governance forms, while, following RO theory, we hypothesize that a high level of performance risk leads towar…

Business process oriented design of ERP systems for small and medium enterprises

BIOPHARMACEUTICAL ALLIANCES AND COMPETITION: A REAL OPTIONS GAMES APPROACH

The competitive landscape where pharmaceutical and biotechnology companies operate has changed radically due to a scientific/technological progress that has revolutionised the process by which drugs are developed. In fact, pharmaceutical industry more and more relies on advances in biochemistry and molecular biology. As a consequence, the number of partnerships between pharmaceutical and biotech firms has grown significantly. Research contributions addressing the biopharmaceutical alliances design have also focused on the optimal timing to sign a partnership. In this paper, we introduce and analyse the effect of competition in biotechnology industry by modelling the decisions of whether and…

The interplay of reciprocity propensity and inequality aversion in two-person games

Economic normative models assume that economic actors are fully rational and selfish while recent studies acknowledge the emotional influence of an economic decision and call for further investigation of biases in decision making. Most decisions involve multiple actors who make decisions following a sequential path as reflected by decision trees; this contingency makes a call for the game theory contribution in the economic decision field. Two-person games are widely used to represent a typical framework of economic decisions. This study aims at further investigating psychological biases affecting decisions in a two-person sequential game. So far similar studies have focused on the principa…

An Open Innovation Decision Support System to Select a Biopharmaceutical R&D Portfolio

Drugs available in the market today, selected several years ago under very uncertain future scenario, have experienced a long and expensive process of research and development carried out following both a closed and an open innovation path. To support this critical selection process, we propose a Decision Support System, able to choose among different candidates the most promising drugs along their best development path. The Decision Support System, based on a real options portfolio optimization model, mapping tools, and what-if rules as well, has been applied to a numerical example available in literature, and the research findings show interesting managerial and academic implications

An affordable way to implement real options to select optimal R&D portfolio

Real option Analysis (ROA) is acknowledged as a powerful tool to evaluate uncertain projects whose uncertainty depends heavily on alternatives available along the project life. The R&D process in the pharmaceutical industry has a long and dynamic life then it is an ideal field of application for ROA. Actually, ROA implementation, as widely demonstrated in literature, is narrowed to very limited cases because its perceived complexity. This research wants to suggest a simplified method, respect the ones available in literature, that could foster the use of ROA: we built up an integer linear programming model, based on a model available in literature, useful for selecting the optimal R&D produ…

Long term capacity decisions in uncertain markets for advanced manufacturing systems incorporating scope economies

Abstract By examining the literature in the field of manufacturing flexibility many researchers have located several form of flexibility by distinguishing them into strategic and operational flexibility forms. Furthermore, many measures and design methods have been proposed for flexible manufacturing systems. Surely scope economies are one of the most important strategic form of flexibility in manufacturing systems and their strategic impact has been acknowledged by the very beginning of the flexible manufacturing era. However, despite several researches are available to address scope economies measurement and design methodologies, very few researches investigate their economic convenience …

Production Planning in Production Networks: Models for Medium and Short-term Planning

Distributed production networks are structures which are considered able to provide the organisational agility and efficiency necessary to compete in the global market. The performance of such organisations heavily depends on the ability of those involved in the network to coordinate their activities. Two approaches are available for managing complex distributed production networks: a centralised approach, where a unique entity (the planner, for instance) has all the necessary information to make planning decisions for the entire network; or a decentralised approach where each entity in the network has the necessary information and knowledge to make autonomous planning decisions, while the …

Sharing economy and incumbents' pricing strategy: The impact of Airbnb on the hospitality industry

Abstract In this paper, we examine how the emergence of sharing economy platforms influences incumbents' price responses. Grounding on the literature on price reactions to new entrants and on the unique characteristics of the sharing economy, we argue that the effect of the penetration of the sharing economy on incumbents' prices is not straightforward, and actually depends on the type of incumbents as well as certain product/service offer characteristics. Indeed, relying on a large sample of hotel price offerings from the Italian market, we find that the effect of the growing relevance of the sharing economy (exemplified by Airbnb) on incumbents' prices depends on the type of incumbents (l…

R&D alliances timing under uncertainty: from theory toward experiments

There is a growing awareness that managers have cognitive biases when making investments decisions under uncertainty. There is evidence of deviation from the predictions derived using normative models, such as real options models. The proposed research sheds light on the importance of integrating normative models with experimental methods in order to predict and explain such cognitive limitations. To this aim, starting from a real options model dealing with alliance timing decisions, we propose a simple design of an experiment, that can been used to test some of the fundamental insights of real options theory in the context of R&D alliances.

Supply chain finance: The role of credit rating and retailer effort on optimal contracts

Abstract Supply chain finance aims at finding the best financing arrangements within a given buyer-supplier dyad. The source of capital can be internal (buyer or supplier) or external (financial institution) to the supply chain. So far, many studies have investigated the optimal mix of the sources of capital; our study aims at contributing to the recent literature that explores the interface of operations and finance extending the supplier-based financing models. As the Covid-19 pandemic hits economic activity, the financial constraints have ever greater importance; knock-on effects of the Covid-19 crisis urges on the critical role of a supply chain that should provide financial resources, …

Capital Structure Decisions in the Biopharmaceutical Industry

Risk assessment and profit sharing in business networks

Abstract Nowadays network is the preferred governance form to conduct economic transactions. Network solution allows to reach flexibility maintaining cost and quality level. Since network concept refers to a great variety of organizational hybrids it is possible to choose the one that fits better market requirements. The new trends in inter-organization relationships push towards network solutions: companies are interested in relationships with partners and customers to overcome resource dependence, to enter too risky market or simply differentiate their business portfolio. The proposed research focuses on the network concept aiming at highlighting threats and opportunities to investigate t…

Current Issues on Production Economics

This Special Issue includes a selection of papers which originally were presented and discussed at the Eighteenth International Working Seminar on Production Economics, Innsbruck, February 24–28, 2014 and subsequently extended and improved. Production Economics was established in the 1970s as an academic discipline focusing on scientific topics treating the interface between engineering, management, and economics with a special emphasis on the financial consequences of decisions in the production domain. The subject is interdisciplinary in nature and it therefore contains a wide range of subjects. The Working Seminar included sessions such as supply chain management, innovation management, ge…

Open innovation: A real option to restore value to the biopharmaceutical R&D

Abstract The pharmaceutical landscape has changed, and new business models, based on alliances, are increasingly being adopted in this industry. Biotechnology advances have pushed this development, and pooling complementary resources coming from incumbents and newcomers is a key skill to succeed: these are the premises for a quick spread of the open innovation (OI) paradigm in this industry. RD to achieve this goal the authors propose a closed-form model that is easy to implement, to evaluate the OI initiative for selecting an optimal RD i.e. licensing-in or not) and the self-financing policy. The proposed model can be easily implemented into a spreadsheet, and the inputs needed to run it a…

Early or late R&D inbound alliance? The impact on knowledge creation

In the R&D supply chain firms can agree an inbound alliance at different times along the process; this decision will impact the supplier’s effort and then the innovation achieved at the end of the agreement. Supplier’s effort is assumed as non-observable then it cannot be constrained contractually. Earlier contracts will ask for a greater cumulated effort although they offer risk-sharing opportunity; later contracts see supplier with a stronger exante bargaining power position, due to shorter (and then less risky) contract length and experience acquired in the previous period in her own. With the hypotheses of maximum innovation value achieved when both partners exert the maximum affordable…

Building SMEs networks in a value chain perspective: a Business Ecosystem approach

An user friendly Real Options based Model to Optimize Pharmaceutical R&D Portfolio

Pharmaceutical industry pays great attention to its R&D process because it is a long, dynamic, very expensive, and uncertain process. On the other hand this process can be modelled as a step-wise process and each stage allows to achieve better information and generally lower uncertainty. In order to build up the best portfolio a tool able to capture the intrinsic flexible nature of the process should be selected: real options analysis has this characteristic but as widely demonstrated in literature, is narrowed to very limited cases because its perceived complexity. Basing on OptFolio, a model available in literature, this paper proposes an user friendly programming model based on Real Opti…

Dinamiche di crescita delle imprese ed evoluzione strutturale del network

HORIZONTAL CO-OPERATION IN SUPPLY CHAIN IN AN E-MARKET ENVIRONMENT