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http://hdl.handle.net/10419/23132
  
Title:Efficient Compensation for Employees? Inventions. PDF Logo
Authors:Kirstein, Roland
Will, Birgit E.
Issue Date:2003
Series/Report no.:CSLE Discussion Paper 2003-03
Abstract:We analyze the legal reform concerning employees? inventions in Germany. Using a simple principal-agent model, we derive a unique efficient payment scheme: a bonus which is contingent on the project value. We demonstrate that the old German law creates inefficient incentives. However, the new law concerning university employees and the pending reform proposal concerning other employees also fail to implement first-best incentives. With suboptimal incentives to spend effort on inventions, the government?s goal, an increase in the number of patents, is likely to be missed. (88 words)
Subjects:Moral hazard
hold-up
efficient fixed wage
JEL:K12
J33
C72
Document Type:Working Paper
Appears in Collections:CSLE Discussion Paper Series, CSLE - Center for the Study of Law and Economics, Universität des Saarlandes

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