I analyze the impact of managerial involvement and the allocation of authority on employee initiative in a setting where both a manager and an employee can come up with new ideas for implementation. Extending the analysis of Aghion and Tirole (1997), the model introduces two effects that are...

Innovation research and organizational practice often focuses on R&D investments and activitiescarried out in designated departments and controlled processes. Anecdotal evidence tells us,however, that this centralized and formalistic approach to innovation is often insufficient. Asignificant...