Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/159465 
Year of Publication: 
2008
Series/Report no.: 
Quaderni - Working Paper DSE No. 624
Publisher: 
Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE), Bologna
Abstract: 
This paper models the optimal provision of incentives to corporate scientists, within an environment where effort is multidimensional, firms compete on the product market, knowledge spills over across companies, and scientists have both monetary and non-monetary motivations. The simultaneous consideration of these aspects generates a number of novel results. First, knowledge spillovers lead firms to soften incentives in order not to benffit competitors, but only when product market competition is high. By contrast, greater knowledge spillovers positively affect the provision of incentives when competition is low. Second, the relationship between the intensity of competition and the power of incentives is U-shaped, and the region where the relationship is positive is smaller the higher the knowledge spillovers. Finally, both the incentives for applied and basic research increase with non-pecuniary benefits scientists obtain from basic research, while a trade-off between monetary pay and non-monetary rewards may occur at the level of the fixed salary. These results provide a novel interpretation of some observed R&D organizational choices by companies, offer insights for the management of scientific and other creative workers, and have implications for public policy.
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Working Paper

Files in This Item:
File
Size
455.86 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.