Optimum Contracts for Research Personnel, Research Employment, and the Establishment of "Rival" Enterprises

40 Pages Posted: 7 Nov 2007

See all articles by Ariel Pakes

Ariel Pakes

National Bureau of Economic Research (NBER); Harvard University - Department of Economics

Shmuel Nitzan

Bar-Ilan University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: March 1982

Abstract

This paper considers the problem of hiring scientists for research and development projects when one takes explicit account of the fact that the scientist may be able to use the information acquired during the project in a rival enterprise. Management's problem is to determine an optimum labor policy for its project. The policy consists of an employment decision and a labor contract. Given optimum behavior, it is straightforward to analyze the effect of the potential for mobility of scientific personnel on project profitability and on research employment. We also formalize conditions under which one would expect to observe a scientist leaving his employer to set up (or join) a rival.

Suggested Citation

Pakes, Ariel and Nitzan, Shmuel, Optimum Contracts for Research Personnel, Research Employment, and the Establishment of "Rival" Enterprises (March 1982). NBER Working Paper No. w0871. Available at SSRN: https://ssrn.com/abstract=351398

Ariel Pakes (Contact Author)

National Bureau of Economic Research (NBER) ( email )

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Harvard University - Department of Economics ( email )

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Cambridge, MA 02138
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Shmuel Nitzan

Bar-Ilan University - Department of Economics ( email )

Ramat-Gan, 52900
Israel
+972.3.531.8930 (Phone)
+972.3.535.3180 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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