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There has been much discussion in the economic and financial literature on the assignment of control rights in joint ventures.7 This assignment is important in
There has been much discussion in the economic and financial literature on the assignment of control rights in joint ventures.7 This assignment is important in alliances involving the development of new technologies. Aghion and Nobel Prize winner Tirole point out that two factors should govern the allocation of control rights:
- The degree to which there may be an underinvestment of either party that could have an adverse effect on the success of the alliance.
- The relative bargaining parties of the two partners.
Critically analyze these factors in light of the allocation of control rights.
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