Setting Efficient Incentives for Agricultural Research: Lessons from Principal-Agent Theory
AbstractA conceptual analysis of important issues in the organization and management of academic research is presented. Principal-agent theory is applied to derive optimal compensation schemes for scientists when they differ in ability, risk aversion, cost of effort, and reservation utility, and to show the optimal trade-off between institutional risk and scientists' abilities. Implications for an efficient organization of research are derived, including how scientists' incentives should be structured to elicit optimal research efforts and direction, whether research direction should be centralized or decentralized, and whether the organization of research should be through external competitive grantsor program and institutional funding. Copyright 2000, Oxford University Press.
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Bibliographic InfoArticle provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.
Volume (Year): 82 (2000)
Issue (Month): 4 ()
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Other versions of this item:
- Huffman, Wallace & Just, Richard E., 1998. "Setting Efficient Incentives for Agricultural Research: Lessons from Principal-Agent Theory," Staff General Research Papers 1389, Iowa State University, Department of Economics.
- Huffman, Wallace & Just, Richard E., 2000. "Setting Efficient Incentives for Agricultural Research: Lessons from Principal-Agent Theory," Staff General Research Papers 5040, Iowa State University, Department of Economics.
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