A firm's incentives to innovate deteriorate when other firms benefit from its R&D activities without incurring a cost. We show under which conditions common ownership of firms can mitigate this impediment to corporate innovation, and test the model's empirical predictions. Common ownership...

Previous research in economics shows that compensation based on the pay-for-performance principle is effective in inducing higher levels of effort and productivity. On the other hand, research in psychology argues that performance-based financial incentives inhibit creativity and innovation. How...

We investigate the choice to conduct interim performance evaluations in a dynamic tournament. When a worker's ability does not influence the marginal benefit of effort, the choice depends on the shape of the cost of effort function. When effort and ability are complementary, feedback has several...

We consider a model of Bayesian persuasion in which the Receiver can detect lies with positive probability. We show that the Sender lies more when the lie detection probability increases. As long as the lie detection probability is sufficiently small the Sender's and the Receiver's equilibrium...

This paper argues incumbent firms may acquire innovative targets solely to discontinue the target's innovation projects and preempt future competition. We call such acquisitions "killer acquisitions." We develop a model illustrating this phenomenon. Using pharmaceutical industry data, we show...

Learning from the experiences of other innovators is a crucial aspect of the innovation process when several workers or teams explore new research avenues in parallel. In such a setting, under-exploration may result as workers attempt to free-ride on the new ideas generated by co-workers. This...

We analyze the interaction between the incentives for free-riding and information revelation among partners in a dynamic setting. Partners contribute to the value of a common project, but have private information about the success of their own contribution efforts. The desire to maintain a...

How does lie detection constrain the potential for one person to persuade another to change her action? We consider a model of Bayesian persuasion in which the Receiver can detect lies with positive probability. We show that the Sender lies more when the lie detection probability increases. As...

We study the welfare implications of the rise of common ownership in the United States from 1994 to 2018. We build a general equilibrium model with a hedonic demand system in which firms compete in a network game of oligopoly. Firms are connected through two large networks: the first reflects...