Suchergebnisse

"Can heuristic information processing affect important product markets? We explore whether the tendency to focus on the left-most digit of a number affects how used car buyers incorporate odometer values in their purchase decisions. Analyzing over 22 million wholesale used-car transactions, we find substantial evidence of this left-digit bias; there are large and discontinuous drops in sale prices at 10,000-mile thresholds in odometer mileage, along with smaller drops at 1,000-mile thresholds. We obtain estimates for the inattention parameter in a simple model of this left-digit bias. We also investigate whether this heuristic behavior is primarily attributable to the final used-car customers or the used-car salesmen who buy cars in the wholesale market. The evidence is most consistent with partial inattention by final customers. We discuss the significance of these results for the literature on inattention and point to other market settings where this type of heuristic thinking may be important. Our results suggest that information-processing heuristics may be important even in markets with large stakes and where information is easy to observe"--National Bureau of Economic Research web site

"Understanding the organization of R&D activities requires the simultaneous consideration of scientific workers' talent and tastes, companies' organizational choices, and the characteristics of the relevant industry. We develop a model of the provision of incentives to corporate scientists, in an environment where (1) scientists engage in multiple activities when performing research; (2) knowledge is not perfectly appropriable; (3) scientists are responsive to both monetary and non-monetary incentives; and (4) firms compete on the product market. We show that both the degree of knowledge spillovers and of market competition affect the incentives given to scientists, and these effects interact. First, high knowledge spillovers lead firms to soften incentives when product market competition is high, and to strengthen incentives when competition is low. Second, the relationship between the intensity of competition and the power of incentives is U-shaped, with the exact shape depending on the degree of knowledge spillovers. We also show that the performance-contingent pay for both applied and basic research increases with the non-pecuniary benefits that scientists obtain from research. We relate our findings to the existing empirical research, and also discuss their implications for management and public policy"--National Bureau of Economic Research web site

This paper proposes a theory for why firms conduct some research activities in-house but outsource other projects to independent partners and for why firms retain different degrees of control over collaborative research projects. The focus is on the determinants of a company's choice to outsource research projects to academic organizations. Because of the different institutional missions of academic organizations, outsourcing a project to a university allows a firm to commit not to terminate or alter a scientifically valuable project before it is complete. This commitment is potentially valuable for the firm in an environment where scientific value and economic value may not coincide, and scientific workers are responsive to the incentives defined by their community of peers. An economic model that formalizes these arguments is developed. Empirical hypotheses are then formulated about the kind of research activities firms will outsource to universities and activities on which they will exert stronger control. Evidence from a sample of industry-university research agreements, as well as from other large-sample and case studies, shows patterns consistent with the predictions of the model.

This paper analyzes the effects of a legislative provision that grants a one-day paid leave of absence to blood donors who are employees in Italy. The analysis is based on a unique dataset with the complete donation histories of the blood donors in an Italian town. The cross-sectional variation in job market status and type of employers, and job switching over time by a subset of donors, are the sources of variation we employ to study whether donors are responsive to the paid-day-off incentive in the choice of their donation days, and in the frequency of their donations. Our results indicate that economic considerations do affect blood donation decisions, for donors donate in days of the week that, given the day-off benefit, maximize their material returns in terms of consecutive days off work. We also find evidence, however, consistent with heterogeneous motivations in different donors, since a subset of donors systematically do not take advantage of the material reward. Finally, we find that the day-off privilege leads donors who are employees to make, on average, one extra donation per year. We discuss the implications of our findings for policies aimed at increasing the supply of blood, and more generally for incentivizing pro-social behavior.

This paper models the optimal provision of incentives to corporate scientists, within an environment where effort is multidimensional, firms compete on the product market, knowledge spills over across companies, and scientists have both monetary and non-monetary motivations. The simultaneous consideration of these aspects generates a number of novel results. First, knowledge spillovers lead firms to soften incentives in order not to benffit competitors, but only when product market competition is high. By contrast, greater knowledge spillovers positively affect the provision of incentives when competition is low. Second, the relationship between the intensity of competition and the power of incentives is U-shaped, and the region where the relationship is positive is smaller the higher the knowledge spillovers. Finally, both the incentives for applied and basic research increase with non-pecuniary benefits scientists obtain from basic research, while a trade-off between monetary pay and non-monetary rewards may occur at the level of the fixed salary. These results provide a novel interpretation of some observed R&D organizational choices by companies, offer insights for the management of scientific and other creative workers, and have implications for public policy.