Thursday 11 December 2025 13:00 - 15:00

MAR 6.33, 6th floor, The Marshall Building, 44 Lincoln's Inn Fields, London WC2A 3LY

About this event

Most innovation occurs inside firms, yet little is known about the organizational forces that shape it. We provide new evidence on how private information affects within-firm innovation using unique data from a global manufacturing firm tracking more than 200,000 workers’ ideas from invention to commercialization. Workers face incentives to inflate idea quantity at year-end to improve evaluations and pay, but these incentives generate substantially lower-quality ideas, consistent with moral hazard. Using quasi-random rotations in direct supervisors, we show that managers with invention experience increase both the quantity and quality of their new teams’ innovative output, indicating that such managers help firms screen ideas when workers hold private information. Complementary evidence from a survey of 1,659 firms suggests these patterns are widespread: firms with greater information asymmetry report more moral hazard and rely more heavily on managers for screening. Together, the results highlight private information as a key constraint on incentives for innovation.

Participants are expected to adhere to the CEP Events Code of Conduct.

Directions

This event will take place in MAR 6.33, 6th floor, The Marshall Building, 44 Lincoln's Inn Fields, London WC2A 3LY.

The building is labelled MAR on the LSE campus map. You can also find us on Google Maps. For further information, go to contact us.

This series is part of the CEP's Growth programme.