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| Author: | Yasaki, Y. Goto, A. |
| Title: | Contribution-proportional remuneration rule for employee inventions and its effects on effort and investment incentives |
| Journal: | Economics of innovation and new technology
2006 : OCT, VOL. 15:7, p. 665-678 |
| Index terms: | employees inventions R&D pay investments incentives models case studies Asia Japan |
| Freeterms: | employers |
| Language: | eng |
| Abstract: | The Japanese court's practice in case of a dispute btw. the employer (hereafter as: empl-er.) and employee (here as: empl.) as to the amount of remuneration for an empl. invention is that the additional profit be divided proportionally according to their respective input contributions. This paper shows that, if the empl-er's investment and empl.'s effort are weakly complementary, this rule causes the share effect to dominate the probability effect, thus leading to excessive investment and effort relative to the joint-payoff-maximising (as: j-p-m.) levels. If the court cannot capture the empl-er's investment as fully as the empl.'s effort, the empl-er's investment may be too low compared to the j-p-m. level. |
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