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A Theory of Trade Secrets in Firms

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Author Info
J·n Z·bojnÌk (University of Southern California, USA)

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Abstract

This article 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 article explores some implications of this assumption for 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. Copyright Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association

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File URL: http://openurl.ingenta.com/content?genre=article&issn=0020-6598&volume=43&spage=831
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Publisher Info
Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 43 (2002)
Issue (Month): 3 (August)
Pages: 831-855
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Handle: RePEc:ier:iecrev:v:43:y:2002:i:3:p:831-855

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  1. Mariagiovanna Baccaraa, 2004. "Outsourcing, Information Leakage and Consulting Firms," Working Papers 04-19, New York University, Leonard N. Stern School of Business, Department of Economics. [Downloadable!]
  2. Heski Bar-Isaac & Mariagiovanna Baccara, 2006. "How to Organize Crime," Working Papers 06-07, New York University, Leonard N. Stern School of Business, Department of Economics. [Downloadable!]
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  3. Fosfuri, Andrea & Rønde, Thomas, 2003. "High-Tech Clusters, Technology Spillovers and Trade Secret Laws," CEPR Discussion Papers 4130, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  4. Andrea Fosfuri & Thomas Rønde, 2003. "High-tech clusters, technology spillovers, and trade secret laws," CIE Discussion Papers 2003-02, University of Copenhagen. Department of Economics. Centre for Industrial Economics. [Downloadable!]
  5. Kameshwari Shankar & Suman Ghosh, 2005. "Favorable Selection in the Labor Market: A Theory of Worker Mobility in R&D Intensive Industries," Working Papers 05006, Department of Economics, College of Business, Florida Atlantic University. [Downloadable!]
  6. Marini, Marco A., 2005. "The value of a new idea: knowledge transmission, workers' mobility and market structure," MPRA Paper 1687, University Library of Munich, Germany, revised Jan 2006. [Downloadable!]
  7. Mariagiovanna Baccara & Ronny Razin, 2004. "Curb Your Innovation: Corporate Conservatism in the Presence of Imperfect Intellectual Property Rights," Levine's Working Paper Archive 122247000000000194, David K. Levine. [Downloadable!]
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  8. Mariagiovanna Baccara & Ronny Razin, 2003. "From Thought to Practice: Appropriation and Endogenous Market Structure with Imperfect Intellectual Property Rights," Working Papers 03-11, New York University, Leonard N. Stern School of Business, Department of Economics. [Downloadable!]
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