IDEAS home Printed from https://ideas.repec.org/a/taf/ecinnt/v35y2026i1p62-81.html

Common ownership and strategic manager compensation in R&D races and contests

Author

Listed:
  • Manfred Stadler
  • Lukas Stickel

Abstract

We study oligopolistic innovation competition in patent races and contests where the firms' R&D decisions are delegated to managers. Some firms are commonly owned by the same investors, whereas the other firms are owned by independent investors. Under such an asymmetric ownership structure, the common owners have the opportunity to coordinate when designing their manager-compensation contracts. The managers of these coordinated firms are incentivized to reduce their R&D effort, while the managers of the independent firms increase it. Pure manager delegation spurs innovation activity. Without efficiency gains, coordination of common owners via the designs of the manager-compensation contracts hinders their R&D activities but fosters those of the independent firms. The former effect dominates so that the pace of innovation is reduced. However, if common ownership induces substantial efficiency gains for commonly owned firms, then e.g. through facilitated cooperation, aggregate innovation activities are fostered so that the pace of innovation increases. These novel results emphasize the importance of a comprehensive modelling approach when assessing the impact of common ownership on innovation competition.

Suggested Citation

  • Manfred Stadler & Lukas Stickel, 2026. "Common ownership and strategic manager compensation in R&D races and contests," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 35(1), pages 62-81, January.
    • Handle: RePEc:taf:ecinnt:v:35:y:2026:i:1:p:62-81
    DOI: 10.1080/10438599.2025.2453147
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/10438599.2025.2453147
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/10438599.2025.2453147?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:ecinnt:v:35:y:2026:i:1:p:62-81. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/GEIN20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.