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This article investigates the effect of patent protection on the mobility of early-career employee-inventors. Using data on patent applications filed at the U.S. Patent and Trademark Office between 2001 and 2012 and examiner leniency as a source of exogenous variation in patent protection, we find that one additional patent granted decreases the likelihood of changing employers, on average, by 23%. This decrease is stronger when the employee has fewer coinventors, works outside the core of the firm, and produces more basic-research innovations. These findings are consistent with the idea that patents turn innovation-related skills into patent-holder-specific human capital. This paper was accepted by Ashish Arora, entrepreneurship and innovation .

In this article, I address the paradox that university grade point averages have increased for decades, whereas the time students invest in their studies has decreased. I argue that one major contributor to this paradox is grading leniency, encouraged by the practice of university administrators to base important personnel decisions on student evaluations of teaching. Grading leniency creates strong incentives for instructors to teach in ways that would result in good student evaluations. Because many instructors believe that the average student prefers courses that are entertaining, require little work, and result in high grades, they feel under pressure to conform to those expectations. Evidence is presented that the positive association between student grades and their evaluation of teaching reflects a bias rather than teaching effectiveness. If good teaching evaluations reflected improved student learning due to effective teaching, they should be positively related to the grades received in subsequent courses that build on knowledge gained in the previous course. Findings that teaching evaluations of concurrent courses, though positively correlated with concurrent grades, are negatively related to student performance in subsequent courses are more consistent with the assumption that concurrent evaluations are the result of lenient grading rather than effective teaching. Policy implications are discussed.

This experiment shows how different levels of fines in three antitrust policies—no leniency (NL), standard leniency (LP), and amnesty plus (AP)—can deter multimarket cartels. With a low fine, AP significantly increases multimarket cartels and leads to higher prices. With a high fine, it has the same effect on collusion as do other policies. With regard to one-market cartels, AP decreases cartel stability relative to LP. With a high fine, it leads to more reporting than does LP, before any investigation and after a first cartel conviction. Higher fines also lead to higher prices in NL and LP, but not higher than in AP.

Although previous research has examined the effectiveness of various levels of punitive reactions to misconduct, researchers have given leader leniency relatively inadequate attention. Prior studies consistently suggest the beneficial effects of reacting less punitively toward misconduct. The current research challenges this notion by delineating a mixed effect of leader leniency on subordinate psychological and behavioral reactions. Building on social exchange theory (i.e., reciprocity norm and rank equilibration norm) and motive attribution literature, the authors argue that when subordinates hold high levels of instrumental motive attribution, leader leniency relates positively to subordinate psychological entitlement, which in turn leads to workplace deviance. In contrast, when subordinates develop high levels of value-expressive motive attribution, leader leniency is positively associated with their felt obligation toward leaders, which positively influences their subsequent organizational citizenship behavior. The results of a field study, a scenario experiment, and a recall experiment conducted to test these hypotheses confirm the double-edged effects of leader leniency. These findings have important implications for theory and practice.

This study examines the determinants and performance effects of centrality bias and leniency bias. The results show that managers respond to their own incentives and preferences when subjectively evaluating performance. Specifically, information-gathering costs and strong employee-manager relationships positively affect centrality bias and leniency bias. The findings also indicate that performance evaluation biases affect not only current performance ratings, but also future employee incentives. Inconsistent with predictions based on the agency perspective, the results show that managers' performance evaluation biases are not necessarily detrimental to compensation contracting. Although centrality bias negatively affects performance improvement, the evidence does not reveal a significant negative relation between leniency bias and performance. Rather, leniency bias is positively associated with future performance, which is consistent with the behavioral argument that bias can improve perceived fairness and, in turn, employee motivation.

We provide the first empirical evidence of the role that calibration committees play in subjective performance evaluation systems. Using proprietary data from a large multinational organization, we begin by showing that calibration committees adjust ratings sparingly (i.e., 25% adjustment rate), but when they do, downward adjustments are significantly more frequent and of greater magnitude than upward adjustments. Calibration committees tend to downward (upward) adjust ratings of supervisors who give higher (lower) than average initial ratings. Taken together, calibration committees improve the consistency of ratings across supervisors and mitigate leniency bias, but exacerbate centrality bias. We also show that calibration committees facilitate the appropriate allocation of decision rights by deferring rating decisions to supervisors who possess a relatively greater information advantage. That is, calibration committees are less likely to adjust the rating of a subordinate who is further removed from committee members in the organizational hierarchy. Finally, we show that calibration committees promote supervisor learning about organizational performance rating expectations through calibration adjustments. This study contributes to the literature on performance evaluation by providing new insights regarding the organizational dynamics of subjective performance evaluation systems when decision rights span hierarchical levels of the organization. This paper was accepted by Suraj Srinivasan, accounting.

China's criminal proceedings have been recognized as being “investigation centred.” I argue that the rise of the Plea Leniency System has led to “prosecution centredness.” Analysis of the operation and consequences of plea leniency shows how the procuratorate has overshadowed the police and further marginalized the courts. In plea leniency, the defendant has little chance of being acquitted and the legal profession provides little defence. While this paradigm shift signals further leniency in criminal justice, rights protections make way for efficiency and crime control. As such, plea leniency has profound implications for the operation of the criminal justice apparatuses, defendants, defence lawyers, and the mode of crime control in China.

We present experimental evidence on the effectiveness of corporate leniency programs. Different from other leniency experiments, ours allows subjects to have freeform communication. We do not find much of an effect of leniency programs. Leniency does not deter cartels. It only delays them. Free-form communication allows subjects to build trust and resolve conflicts. Reporting and defection rates are low, especially when compared to experiments with restricted communication. Indeed, communication is so effective that, with leniency in place, prices are not affected if cartels are fined and cease to exist.

We find that regulators can implement identical rules inconsistently due to differences in their institutional design and incentives, and this behavior may adversely impact the effectiveness with which regulation is implemented. We study supervisory decisions of U.S. banking regulators and exploit a legally determined rotation policy that assigns federal and state supervisors to the same bank at exogenously set time intervals. Comparing federal and state regulator supervisory ratings within the same bank, we find that federal regulators are systematically tougher, downgrading supervisory ratings almost twice as frequently as do state supervisors. State regulators counteract these downgrades to some degree by upgrading more frequently. Under federal regulators, banks report worse asset quality, higher regulatory capital ratios, and lower return on assets. Leniency of state regulators relative to their federal counterparts is related to costly outcomes, such as higher failure rates and lower repayment rates of government assistance funds. The discrepancy in regulator behavior is related to different weights given by regulators to local economic conditions and, to some extent, differences in regulatory resources. We find no support for regulator self-interest, which includes ‘‘revolving doors’’ as a reason for leniency of state regulators.

This special issue marks the 25th anniversary of the introduction of a leniency program for antitrust in the EU and contains five original papers: Each paper examines the effects of design parameters of leniency programs on their performance. Before introducing each contribution separately, we put them in perspective by introducing readers to the existing theoretical, empirical, and experimental literature on corporate leniency programs for antitrust.