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On Optimal Social Investment in the Sciences and Humanities


  • Franz Gehrels



This essay examines the optimization of public, non-profit investment in the natural and social sciences and humanities, given that the individual project outcomes are spread over time and are uncertain. The more distant the results, the greater is the uncertainty, as measured by the success-or-failure variance. Diversification into many simultaneous projects reduces but does not eliminate this risk. By contrast, in a deterministic, no-risk model, there is no way to optimize undertakings in pure science other than to accept social or political consensus. The commonly-used planners’ discount rate of zero is shown in the Appendix to have the additional property of leading to the Golden Rule. Copyright International Atlantic Economic Society 2010

Suggested Citation

  • Franz Gehrels, 2010. "On Optimal Social Investment in the Sciences and Humanities," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 38(3), pages 325-330, September.
  • Handle: RePEc:kap:atlecj:v:38:y:2010:i:3:p:325-330
    DOI: 10.1007/s11293-010-9234-2

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    Cited by:

    1. Franz Gehrels, 2013. "United States and German Real Capital Formation and Social Investment in the Sciences and Humanities," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 41(3), pages 225-229, September.

    More about this item


    Optimal; Investment; Sciences and Humanities; Uncertainty; D70; D80; E20; H50; O46;

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General


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