Search results for "Alliance timing"

An alliance timing game under real options in biopharmaceutical industry

2014

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

2017

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…

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

2015

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.