Balancing Incentives in Pharmaceutical Research
نویسندگان
چکیده
When effort is multi-dimensional, firms will optimally “balance” the provision of incentives. Setting high-powered incentives along one dimension raises the returns to providing high-powered incentives along other dimensions which compete for the worker’s effort and/or attention (Holmstrom and Milgrom, 1991). We test for this effect in the context of for-profit pharmaceutical laboratories using detailed data on individual research programs. Consistent with this complementarity hypothesis, there is both cross-sectional and time-series evidence that firms providing strong promotion-based incentives for scientists to invest in basic research are more likely to provide strong incentives to supply effort towards applied research. JEL Classification Numbers: L2, L65, O32.
منابع مشابه
Balancing Incentives: The Tension Between Basic and Applied Research
When effort is multi-dimensional, firms will optimally “balance” the provision of incentives. Setting high-powered incentives along one dimension raises the returns to providing high-powered incentives along other dimensions which compete for the worker’s effort and/or attention (Holmstrom and Milgrom, 1991). We test for this effect in the context of for-profit pharmaceutical laboratories using...
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