Deadlines Versus Continuous Incentives: Evidence from the Patent Office

52 Pages Posted: 22 Jan 2024 Last revised: 7 Feb 2024

See all articles by Michael Frakes

Michael Frakes

Duke University School of Law

Melissa F. Wasserman

University of Texas at Austin - School of Law

Date Written: January 2024

Abstract

A quota system with an associated deadline may retain the possibility of worker procrastination and related deadline behaviors. A performance appraisal system based on continuous temporal incentives, on the other hand, has the potential to alleviate deadline effects but may lose some of the quality-related benefits associated with the flexibility of a quota/deadline system. We explore these tradeoffs by observing patent examiner behavior and examination quality outcomes surrounding a 2011 reform at the U.S. Patent and Trademark Office that built on its bi-weekly quota system by adding a set of bonuses tied to daily examination-pendency measures. We find a substantial reduction in deadline effects and near complete temporal smoothing in examiner behavior in connection with the reform, leading to large reductions in average examination pendency while resulting in no corresponding reductions in the accuracy of examinations.

Suggested Citation

Frakes, Michael and Wasserman, Melissa F., Deadlines Versus Continuous Incentives: Evidence from the Patent Office (January 2024). NBER Working Paper No. w32066, Duke Law School Public Law & Legal Theory Series No. 2024-06, Available at SSRN: https://ssrn.com/abstract=4702280

Michael Frakes (Contact Author)

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States

Melissa F. Wasserman

University of Texas at Austin - School of Law ( email )

727 East Dean Keeton Street
Austin, TX 78705
United States

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