As a first step towards understanding the evolution of small groups in firms, this paper develops and tests a simple decision-theoretical model of research-unit evolution in which, as managers resolve their uncertainty over time, they shut down under-performing units and remove under-performing...

We use a simple model of collaborative innovation to structure an empirical analysis of minority equity links in biotechnology alliances between clients and R&D firms. In the model, an equity link is an investment in information acquisition: it improves the ability of the client to learn about...