A Theory of Trade Secrets in Firms

23 Pages Posted: 1 Nov 2000

See all articles by Jan Zabojnik

Jan Zabojnik

Queen's University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: October 3, 2000

Abstract

This paper provides a simple theoretical model of trade secrets in hierarchical firms. A crucial assumption is that each manager has access to trade secrets pertaining to his own hierarchical level as well as to all lower levels. The paper explores some implications of this assumption for the optimal degree of trade secrets accumulation and protection as well as for the wage structure in firms. In addition, the model implies that managers may have an incentive to overpay their subordinates and protect their firms' trade secrets too much.

Keywords: Trade Secrets, Turnover, Wage Structure

JEL Classification: O3, J31, J63

Suggested Citation

Zabojnik, Jan, A Theory of Trade Secrets in Firms (October 3, 2000). USC Finance & Business Econ. Working Paper No. 01-20. Available at SSRN: https://ssrn.com/abstract=244573 or http://dx.doi.org/10.2139/ssrn.244573

Jan Zabojnik (Contact Author)

Queen's University - Department of Economics ( email )

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HOME PAGE: http://qed.econ.queensu.ca/faculty/zabojnik/Page/

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