IDEAS home Printed from https://ideas.repec.org/p/isu/genstf/199808010700001303.html
   My bibliography  Save this paper

Setting Efficient Incentives for Agricultural Research: Lessons from Principal-Agent Theory

Author

Listed:
  • Huffman, Wallace E.
  • Just, Richard E.

Abstract

This paper presents a conceptual analysis of important issues in management of agricultural research drawing on principal-agent theory and derives implications for finding and management of agricultural research. Building on well known attributes of research, whereby research results are risky, outputs are uncertain and sometimes im anticipated, more than one approach has validity for a given topic, we consider how incentives should be structured to elicit optimal research effort and directions, whether research directions should be set at a centralized or decentralized level, and the optimal duplication of effort. The results suggest that (i) the current trend toward replacement of formula funding by competitive grants allocation may be ill conceived, (ii) a mixed system with some research funding and direction at the federal level, some at the state level, an perhaps some at regional levels is advantageous, and (iii) finding of competing scientists working on the same problem at different institutions has merit.

Suggested Citation

  • Huffman, Wallace E. & Just, Richard E., 1998. "Setting Efficient Incentives for Agricultural Research: Lessons from Principal-Agent Theory," ISU General Staff Papers 199808010700001303, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genstf:199808010700001303
    as

    Download full text from publisher

    File URL: https://dr.lib.iastate.edu/server/api/core/bitstreams/78c5d2a0-7aa9-4a7e-adec-6b530ea8618e/content
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Steven D. Levitt, 1995. "Optimal Incentive Schemes When Only the Agents' "Best" Output Matters to the Principal," RAND Journal of Economics, The RAND Corporation, vol. 26(4), pages 744-760, Winter.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jovanovic, Dragan, 2013. "Mergers, managerial incentives, and efficiencies," DICE Discussion Papers 88, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    2. Park, Timothy A. & Lohr, Luanne, 2007. "Performance evaluation of university extension providers: A frontier approach for ordered response data," European Journal of Operational Research, Elsevier, vol. 182(2), pages 899-910, October.
    3. Huffman, Wallace E., 1999. "Finance, Organization, and Impacts of U.S. Agricultural Research: Future Prospects," ISU General Staff Papers 199903010800001315, Iowa State University, Department of Economics.
    4. Lohr, Luanne & Park, Timothy A., 2003. "Improving Extension Effectiveness for Organic Clients: Current Status and Future Directions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(3), pages 1-17, December.
    5. Huffman, Wallace E., 1999. "New Insights on the Organization of Agricultural Research: Theory and Evidence for Western Developed Countries," ISU General Staff Papers 199907010700001319, Iowa State University, Department of Economics.
    6. Yigal Gerchak & Christian Schmid, 2022. "Principal–agent models where a principal is only affected by extreme performances," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(2), pages 468-477, March.
    7. Scott M Gilpatric, 2009. "Risk Taking In Contests And The Role Of Carrots And Sticks," Economic Inquiry, Western Economic Association International, vol. 47(2), pages 266-277, April.
    8. David Pérez-Castrillo & David Wettstein, 2012. "Innovation Contests," Working Papers 654, Barcelona School of Economics.
    9. Goldfain, Ekaterina & Kovac, Eugen, 2005. "Financing of Competing Projects with Venture Capital," Bonn Econ Discussion Papers 37/2005, University of Bonn, Bonn Graduate School of Economics (BGSE).
    10. Barbieri, Stefano & Malueg, David A., 2016. "Private-information group contests: Best-shot competition," Games and Economic Behavior, Elsevier, vol. 98(C), pages 219-234.
    11. Huffman, Wallace E. & Just, Richard E., 1999. "Setting Efficient Incentives for Agricultural Research: Lesson from Principal-Agent Theory II," ISU General Staff Papers 199908010700001321, Iowa State University, Department of Economics.
    12. Esther Gal‐Or, 1997. "Multiprincipal Agency Relationships as Implied by Product Market Competition," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(1), pages 235-256, June.
    13. Agranov, Marina & Tergiman, Chloe, 2013. "Incentives and compensation schemes: An experimental study," International Journal of Industrial Organization, Elsevier, vol. 31(3), pages 238-247.
    14. Lohr, Luanne & Park, Timothy A., 2008. "Testing Nonlinear Logit Models of Performance Effectiveness Ratings: Cooperative Extension and Organic Farmers," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(2), pages 667-679, August.
    15. Baliga, Sandeep & Sjostrom, Tomas, 2001. "Optimal Design of Peer Review and Self-Assessment Schemes," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 27-51, Spring.
    16. Bin Hu & Damian R. Beil & Izak Duenyas, 2013. "Price-Quoting Strategies of an Upstream Supplier," Management Science, INFORMS, vol. 59(9), pages 2093-2110, September.
    17. Thomas, Jonathan P. & Wang, Zhewei, 2013. "Optimal punishment in contests with endogenous entry," Journal of Economic Behavior & Organization, Elsevier, vol. 91(C), pages 34-50.
    18. Lohr, Luanne & Park, Timothy A., 2004. "Benchmarking Organizational Performance Of University Extension: A Stochastic Frontier Approach," Faculty Series 16721, University of Georgia, Department of Agricultural and Applied Economics.
    19. repec:eee:labchp:v:3:y:1999:i:pc:p:3529-3571 is not listed on IDEAS

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:isu:genstf:199808010700001303. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Curtis Balmer (email available below). General contact details of provider: https://edirc.repec.org/data/deiasus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.