Focal Randomization: An optimal mechanism for the evaluation of R&D
AbstractIn most countries, governments intervene in the process of R&D by financing a substantial part of it. The mechanism employed for choosing the projects to be financed is a committee composed of experts who evaluate projects in their field of specialization, and decide which ones should be funded. This mechanism for evaluating projects is conservative. Proposals of new ideas are too often rejected, and inventions are commonly thrown out of the set of potential projects. In this paper, I propose a mechanism that will allow less conformity: focal randomization. Focal randomization mechanism (FRM) states that projects which are unanimously ranked at the top by all reviewers, will be adopted. Projects perceived as valueless by all are rejected, while projects that are ranked differently will be randomized. I compare the average return under the present and proposed mechanism. I examine under which conditions this new mechanism is preferable, and its consequences on economic growth.
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Bibliographic InfoPaper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c011_035.
Length: 18 pages JEL Classification:
Date of creation: Jun 2006
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-12-01 (All new papers)
- NEP-INO-2006-12-01 (Innovation)
- NEP-PPM-2006-12-01 (Project, Program & Portfolio Management)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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