Individual preferences, organization, and competition in a model of R&D incentive provision
By: Nicola Lacetera, Lorenzo Zirulia
Contributors: Zirulia, Lorenzo; National Bureau of Economic Research
Series: NBER working paper series -- working paper 17031; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 17031.
Publisher: National Bureau of Economic Research
Published: 2011
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "Understanding the organization of R&D activities requires the simultaneous consideration of scientific workers' talent and tastes, companies' organizational choices, and the characteristics of the relevant industry.  We develop a model of the provision of incentives to corporate scientists, in an environment where (1) scientists engage in multiple activities when performing research; (2) knowledge is not perfectly appropriable; (3) scientists are responsive to both monetary and non-monetary incentives; and (4) firms compete on the product market.  We show that both the degree of knowledge spillovers and of market competition affect the incentives given to scientists, and these effects interact.  First, high knowledge spillovers lead firms to soften incentives when product market competition is high, and to strengthen incentives when competition is low.  Second, the relationship between the intensity of competition and the power of incentives is U-shaped, with the exact shape depending on the degree of knowledge spillovers.  We also show that the performance-contingent pay for both applied and basic research increases with the non-pecuniary benefits that scientists obtain from research.  We relate our findings to the existing empirical research, and also discuss their implications for management and public policy"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 8/2/2011.

Includes bibliographical references.

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