Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/23132 
Year of Publication: 
2003
Series/Report no.: 
CSLE Discussion Paper No. 2003-03
Publisher: 
Universität des Saarlandes, Center for the Study of Law and Economics (CSLE), Saarbrücken
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

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