Contract Design of Technology Property Rights Transaction

IPRs (Intellectual Property Rights) transaction is important to development of technology innovation. The market for information is replete with imperfection and this is reflected in the structure of IPRs transaction contracts. To alleviate the information asymmetric between seller and buyer, we introduce a third party appraisal institution. Through selecting different appraising fee payment structure, the seller can send signal to the market and the buyer. Thus, the seller with high quality technology can be separated from those with low quality one and increase the success probability of the deal. The model relates adverse selection and moral hazard problem of technology transfer, giving the signaling separating equilibrium of the game. Finally, we suggest that the role of the third party appraising institution can be played by the Technology Exchange Market.