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

A. Pakes, S. Nitzan

Research output: Contribution to journalArticlepeer-review

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.
Original languageAmerican English
Pages (from-to)345-365
JournalJournal of Labor Economics
Volume1
Issue number4
StatePublished - 1982

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