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Quotation of the Day…

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… is from page 134 of the 2007 2nd Edition of Gary Becker [2]‘s 1971 textbook, Economic Theory [3] (footnote deleted):

Some caution is prudent, however, in accepting the basic supposition that R and D expenditures by one firm reduce the costs of other firms.  Firms introducing innovations are alleged to be forced to share their knowledge with competitors through the bidding away of employees who are privy to their secrets.  This may well be a common practice, but if employees benefit from access to salable information about secrets, they would be willing to work more cheaply than otherwise.  If so, innovating firms would be able to hire labor more cheaply than other firms, and this would at least partly offset the loss from having to disclose one’s knowledge to competitors.

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