This paper builds a theoretical foundation for the dynamics of knowledge sharing in private industry. In practice, research and development projects can take years or even decades to complete. We model an uncertain research process, where research projects consist of multiple sequential steps....

We consider a model of innovation that distinguishes between ideas and innovations. While innovation responds to incentives, ideas are a scarce resource that provide an exogenous constraint on the rate of innovation. We investigate how the optimal reward structure is shaped by the scarcity of...