This paper examines the optimal incentive scheme in motivating people to innovate under ambiguity. When an innovation's prospects are ambiguous, the use of extrinsic, high-powered incentives can lead the agent's beliefs about the project's outcome to deviate from that of the principal's, which...

We show that the similarity of a firm's technological expertise with other firms affects outcomes in the managerial labor market. Using each firm's patent portfolio to estimate its technological expertise, we find that its similarity in technological expertise with other firms is strongly...

Testing portfolio alpha against a linear factor model can be interpreted as a mean-variance efficiency test of the optimal portfolio of factors. For ambiguity neutral investor, adding active portfolio with statistically significant alpha always implies efficiency gain relative to the optimal...