Knowledge that Transforms

Through a survey, private economic value estimates were obtained on 964 inventions made in the United States and Germany and on which German patent renewal fees were paid to full-term expiration in, 1995. A search of subsequent U.S. and German patents yielded counts of citations to those patents. Patents renewed to full-term were significantly more highly cited than patents allowed to expire before their full term. The higher an invention's economic value estimate was, the more the patent was subsequently cited.

Many incentives in organizations arise not through explicit formal incentive contracts but rather implicitly through career concerns. This paper models career concerns through agents trying to manipulate the market assessment of their future productivity. The information flow from current actions to market assessment is therefore crucial in determining the nature of these incentives. Improved information may either increase or reduce incentives. The impact of information provides a major distinction between the explicit and implicit incentives model. The paper derives general results on comparisons of information structures which serve as counterparts to the standard results on information structures in the principal-agent model: sufficient statistic, impact of a Blackwell garbling, comparison of inclusive information structures.

The front matter of the March 1999 issue contains the Table of Contents.

The front matter of the May 1999 issue contains the Table of Contents.

The front matter of the September 1999 issue contains the Table of Contents.