The real options approach to valuation - Haskayne School of Business

Contract Specifics • Developer retains right, supplies monopoly quan*ty – Full discre*onary research grant – Sponsor co-­‐payment – Patent extension • Sponsor can contract the socially op*mal quan*ty to be produced – Purchase commitment contracts • We abstract from agency problem arising from asymmetric informa*on between vaccine developer and sponsor, and from contrac*ng issues