Dennis A. Yao

Lewis, Tracy R. and Dennis A. Yao. (2001, revised 2006). "Innovation, Knowledge Flow, and Worker Mobility."

• Abstract: In knowledge-driven industrial markets employee turnover is often quite high despite each firm’s interest in restricting knowledge flow resulting from employee departures. We present a dynamic contracting and matching model of the employment relationship between a firm and a worker (engineer) that provides an equilibrium explanation for high turnover. Incompleteness of the contracting relationship makes it optimal for firms to adopt open R&D environments as a recruitment inducement when labor is in relatively short supply. Such environments facilitate turnover. We examine how openness of R&D environments varies according to labor market conditions, expected quality of initial firm-employee match, legal protection of IP, and the longevity of the product cycle. These results are useful for understanding why geographic clusters often foster innovation.

Anton, James J. and Dennis A. Yao (2011).  "Delay as Agenda Setting." 

• Abstract: In this paper we examine a class of dynamic decision-making processes that involve endogenous commitment.  Our analysis is relevant to group decision making settings as well as to hierarchical decision making settings in which, for example, subordinates attempt to influence their superiors.  An inability to commit leads to the possibility of strategic delay by decision participants who differ in their preferences and are limited by the resources they can allocate to influencing decisions.  We focus on sources of delay caused by the strategic interaction of decision makers over time and find that the opportunity to delay decisions leads the participants to sometimes act against their short-run interests.  Two classes of activity of this type emerge which we refer to as focusing and pinning.  We also explore how strategic delay alters the benefits from agenda setting.