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Financial incentives in academia: research versus development


  • Banal-Estanol, A.
  • Macho-Stadler, I.


This paper investigates the effects of monetary rewards on the pattern of research. We build a simple repeated model of a researcher capable to obtain innovative ideas. We analyse how the legal environment affects the allocation of researcher?s time between research and development. Although technology transfer objectives reduce the time spent in research, they might also induce researchers to conduct research that is more basic in nature, contrary to what the ?skewing problem? would presage. We also show that our results hold even if development delays publication.
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Suggested Citation

  • Banal-Estanol, A. & Macho-Stadler, I., 2007. "Financial incentives in academia: research versus development," Working Papers 07/09, Department of Economics, City University London.
  • Handle: RePEc:cty:dpaper:07/09

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    References listed on IDEAS

    1. Nicola Lacetera, 2009. "Academic entrepreneurship," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 30(7), pages 443-464.
    2. Philippe Aghion & Mathias Dewatripont & Jeremy C. Stein, 2008. "Academic freedom, private-sector focus, and the process of innovation," RAND Journal of Economics, RAND Corporation, vol. 39(3), pages 617-635.
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    Cited by:

    1. Nicola Lacetera, 2009. "Academic entrepreneurship," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 30(7), pages 443-464.

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    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives


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