A Model of Grants Distribution: A Screening Approach
AbstractIn this paper we develop a formal model of the optimal financing of research projects, when the projects differ in both their success probability and the cost of undertaking. We show that in the benchmark case of publicly observable costs the first best can be achieved. If the costs are private information, however, the optimal contract will imply some inefficiency. We provide the first order characterization of the optimal financing scheme in this case and explicitly find it, assuming CARA utility for the institutions
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Bibliographic InfoPaper provided by Econometric Society in its series Econometric Society 2004 Australasian Meetings with number 252.
Date of creation: 11 Aug 2004
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- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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- Paulo Barelli & Suren Basov & Mauricio Bugarin & Ian King, 2012.
"The Robustness of Exclusion in Multi-dimensional Screening,"
RCER Working Papers
571, University of Rochester - Center for Economic Research (RCER).
- Paulo Barelli & Suren Basov & Mauricio Bugarin & Ian King, 2012. "The Robustness of Exclusion in Multi-dimensional Screening," RCER Working Papers 576, University of Rochester - Center for Economic Research (RCER).
- Paulo Barelli & Suren Basov & Mauricio Bugarin & Ian King, 2010.
"The Inclusiveness of Exclusion,"
Department of Economics - Working Papers Series
1096, The University of Melbourne.
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