Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/32247 
Year of Publication: 
2008
Series/Report no.: 
Preprints of the Max Planck Institute for Research on Collective Goods No. 2008,38
Publisher: 
Max Planck Institute for Research on Collective Goods, Bonn
Abstract: 
The allocation of intellectual property rights between firms and employed researchers causes a principal-agent problem between the two parties. We investigate the working contracts of inventors employed by German chemical, pharmaceutical, and electrical engineering firms at the turn of the 20th century and show that some firms were aware of the principal-agent problem and offered performance-related compensation schemes to their scientists. However, neither a higher total compensation nor a higher share of variable compensation in total compensation is correlated with a higher innovative output. Thus, incentives techniques were already used during the early history of industrial research laboratories, but their impact on innovative output was unsystematic.
Subjects: 
Compensation packages
incentives
innovation
economic history
Germany, pre-1913
JEL: 
N83
O31
J33
Document Type: 
Working Paper

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