To Innovate Or Not To Innovate: Incentives And Innovation In Hierarchies
AbstractHierarchical organizations often perform poorly in inducing the adoption of innovations. The authors examine a principal offering contracts to agents who make unobservable effort and adoption-of-innovation choices (yielding moral hazard); who occupy jobs of differing, unobserved productivities (yielding adverse selection); and who engage in a repeated relationship with the principal (causing a ratchet effect to arise). Increasing the rate of adoption of an innovation in such an organization causes the incentive costs of adoption to increase at an increasing rate. Relatively low rates of adoption may then be a response to the prohibitive incentive costs of higher adoption rates. Copyright 1990 by American Economic Association.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by Pennsylvania State - Department of Economics in its series Papers with number 9-88-4.
Length: 38 pages
Date of creation: 1988
Date of revision:
Contact details of provider:
Postal: PENNSYLVANIA STATE UNIVERSITY, DEPARTMENT OF ECONOMICS, UNIVERSITY PARK PENNSYLVANIA 16802 U.S.A.
Web page: http://econ.la.psu.edu/
More information through EDIRC
innovations ; moral hazard ; decision making;
Other versions of this item:
- Dearden, James & Ickes, Barry W & Samuelson, Larry, 1990. "To Innovate or Not to Innovate: Incentives and Innovation in Hierarchies," American Economic Review, American Economic Association, vol. 80(5), pages 1105-24, December.
- Dearden, J. & Ickes, B.W. & Samuelson, L., 1988. "To Innovate Or Not To Innovate: Incentives And Innovation In Hierarchies," Papers 0-88-1, Pennsylvania State - Department of Economics.
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Gary Charness & Peter Kuhn & Marie-Claire Villeval, 2010.
"Competition and the Ratchet Effect,"
NBER Working Papers
16325, National Bureau of Economic Research, Inc.
- Charness, Gary & Kuhn, Peter J. & Villeval, Marie Claire, 2008. "Competition and the Ratchet Effect," IZA Discussion Papers 3784, Institute for the Study of Labor (IZA).
- Gary Charness & Peter Kuhn & Marie-Claire Villeval, 2008. "Competition and the Ratchet Effect," Working Papers 0828, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
- Gary Charness & Peter Kuhn & Marie-Claire Villeval, 2011. "Competition and the Ratchet Effect," Post-Print halshs-00333590, HAL.
- Dominique Demougin & Anja Schöttner, 2010. "Technology adoption under hidden information," Journal of Economics, Springer, vol. 100(1), pages 1-18, May.
- Walter Buhr, 2009. "Infrastructure of the Market Economy," Volkswirtschaftliche DiskussionsbeitrÃ¤ge 132-09, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
- AMBEC, Stefan & POITEVIN, Michel, 2001.
"Organizational Design of R&D Activities,"
Cahiers de recherche
2001-12, Universite de Montreal, Departement de sciences economiques.
- Ambec, S. & Poitevin, M., 2001. "Organizational Design of R&D Activities," Cahiers de recherche 2001-12, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Stefan Ambec & Michel Poitevin, 2001. "Organizational Design of R&D Activities," CIRANO Working Papers 2001s-38, CIRANO.
- Stefan Ambec & Michel Poitevin, 2000. "Organizational Design of R & D Activities," Econometric Society World Congress 2000 Contributed Papers 0190, Econometric Society.
- Stefan Ambec & Michel Poitevin, 2001. "Organizational Design of R&D activities," CSEF Working Papers 60, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
- James D Adams & Adam B Jaffe, 1994. "The Span of the Effect of R&D in the Firm and Industry," Working Papers 94-7, Center for Economic Studies, U.S. Census Bureau.
- James D. Adams & J. Roger Clemmons & Paula E. Stephan, 2006.
"How Rapidly Does Science Leak Out?,"
NBER Working Papers
11997, National Bureau of Economic Research, Inc.
- Alessandro Rossi, 2001.
"The Effective Design of Managerial Incentive Systems:Combining Theoretical Principles and Practical Trade'-offs,"
047, Department of Computer and Management Sciences, University of Trento, Italy, revised 29 Jun 2003.
- Alessandro Rossi, 2001. "The Effective Design of Managerial Incentive Systems: Combining Theoretical Principlesand Practical Trade-offs," ROCK Working Papers 015, Department of Computer and Management Sciences, University of Trento, Italy, revised 12 Jun 2008.
- Joseph Persky, 1991. "Retrospectives: Lange and von Mises, Large-Scale Enterprises, and the Economic Case for Socialism," Journal of Economic Perspectives, American Economic Association, vol. 5(4), pages 229-236, Fall.
- David J. Cooper, 1999. "Gaming against Managers in Incentive Systems: Experimental Results with Chinese Students and Chinese Managers," American Economic Review, American Economic Association, vol. 89(4), pages 781-804, September.
- Brown, Annette N. & Ickes, Barry W. & Ryterman, Randi, 1994. "Russian Federation - The myth of monopoly : a new view of industrial structure in Russia," Policy Research Working Paper Series 1331, The World Bank.
- Fung, Ka Wai Terence & Lau, Chi Keung Marco & Chan, Kwok Ho, 2013. "A R&D Based Real Business Cycle Model," MPRA Paper 52571, University Library of Munich, Germany.
- Sergei Guriev & Barry W. Ickes, 2000. "Microeconomic Aspects of Economic Growth in Eastern Europe and the Former Soviet Union, 1950-2000," William Davidson Institute Working Papers Series 348, William Davidson Institute at the University of Michigan.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel).
If references are entirely missing, you can add them using this form.