IDEAS home Printed from
   My bibliography  Save this article

Public Policy towards Science : Picking Stars or Spreading the Wealth ?


  • Ashish Arora
  • Alfonso Gambardella


[fre] Ce papier fournit un nouveau fondement rationnel pour le financement public de la recherche scientifique. Nous montrons que les financements industriels de la recherche scientifique conduisent à une allocation de ressources privilégiant de façon excessive les scientifiques ayant une réputation ancienne très forte (les « étoiles »). Ceci, est dû à ce que l'industrie a moins d'incitation que la société à financer des chercheurs simplement en vue de tester leur capacité. [eng] This paper provides another rationale for public funding of scientific research. We argue that industry funding of scientific research will lead to an excessive allocation of resources to scientists with greater past reputation (the « stars »). This is because industry will have fewer incentives than society as a whole to fund researchers (e.g. young people) just for the sake of assessing whether they are « able » or not. Not only will public agencies fund less prominent researchers as well, but we show with a simple model that this strategy is efficient in the long run.

Suggested Citation

  • Ashish Arora & Alfonso Gambardella, 1997. "Public Policy towards Science : Picking Stars or Spreading the Wealth ?," Revue d'Économie Industrielle, Programme National Persée, vol. 79(1), pages 63-75.
  • Handle: RePEc:prs:recind:rei_0154-3229_1997_num_79_1_1653
    Note: DOI:10.3406/rei.1997.1653

    Download full text from publisher

    File URL:
    Download Restriction: no

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    2. Kirk Monteverde & David J. Teece, 1982. "Supplier Switching Costs and Vertical Integration in the Automobile Industry," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 206-213, Spring.
    3. Brian J. Loasby, 1994. "Organisational Capabilities And Interfirm Relations," Metroeconomica, Wiley Blackwell, vol. 45(3), pages 248-265, October.
    4. Rabin, Matthew, 1993. "Information and the Control of Productive Assets," Journal of Law, Economics, and Organization, Oxford University Press, vol. 9(1), pages 51-76, April.
    5. Coase, Ronald H., 1990. "Accounting and the theory of the firm," Journal of Accounting and Economics, Elsevier, vol. 12(1-3), pages 3-13, January.
    6. L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
    7. Foss, Nicolai Juul, 1993. "Theories of the Firm: Contractual and Competence Perspectives," Journal of Evolutionary Economics, Springer, vol. 3(2), pages 127-144, May.
    8. Cheung, Steven N S, 1983. "The Contractual Nature of the Firm," Journal of Law and Economics, University of Chicago Press, vol. 26(1), pages 1-21, April.
    9. Demsetz, Harold, 1988. "The Theory of the Firm Revisited," Journal of Law, Economics, and Organization, Oxford University Press, vol. 4(1), pages 141-161, Spring.
    10. Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 324-340, Autumn.
    11. Nicolai J. Foss, 1996. "Firms, Incomplete Contracts and Organizational Learning," DRUID Working Papers 96-2, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    12. David J. Teece, 2003. "Towards an Economic Theory of the Multiproduct Firm," World Scientific Book Chapters,in: Essays In Technology Management And Policy Selected Papers of David J Teece, chapter 15, pages 419-446 World Scientific Publishing Co. Pte. Ltd..
    13. Nicolai J. Foss, 1996. "Knowledge-Based Approaches to the Theory of the Firm: Some Critical Comments," Organization Science, INFORMS, vol. 7(5), pages 470-476, October.
    14. S.A. Lippman & R.P. Rumelt, 1982. "Uncertain Imitability: An Analysis of Interfirm Differences in Efficiency under Competition," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 418-438, Autumn.
    15. Richardson, G B, 1972. "The Organisation of Industry," Economic Journal, Royal Economic Society, vol. 82(327), pages 883-896, September.
    16. Nicolai J. Foss, 1994. "Why transaction cost economics needs evolutionary economics," Revue d'Économie Industrielle, Programme National Persée, vol. 68(1), pages 7-26.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Antonelli, Cristiano & Crespi, Francesco, 2013. "The "Matthew effect" in R&D public subsidies: The Italian evidence," Technological Forecasting and Social Change, Elsevier, vol. 80(8), pages 1523-1534.
    2. Qiang Zhi & Tianguang Meng, 2016. "Funding allocation, inequality, and scientific research output: an empirical study based on the life science sector of Natural Science Foundation of China," Scientometrics, Springer;Akadémiai Kiadó, vol. 106(2), pages 603-628, February.
    3. Mangematin, V., 2000. "PhD job market: professional trajectories and incentives during the PhD," Research Policy, Elsevier, vol. 29(6), pages 741-756, June.
    4. Zhifeng Yin & Qiang Zhi, 2017. "Dancing with the academic elite: a promotion or hindrance of research production?," Scientometrics, Springer;Akadémiai Kiadó, vol. 110(1), pages 17-41, January.
    5. Ramello Giovanni B., 2005. "Intellectual Property and the Markets of Ideas," Review of Network Economics, De Gruyter, vol. 4(2), pages 1-20, June.
    6. Cellini, Roberto & Cuccia, Tiziana, 2007. "Information externality in the arts and the public intervention: a brief note," MPRA Paper 5193, University Library of Munich, Germany.

    More about this item


    Access and download statistics


    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:prs:recind:rei_0154-3229_1997_num_79_1_1653. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Equipe PERSEE). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.