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Incentives in Basic Research

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  • Edward P. Lazear

Abstract

Individuals involved in basic research, like other workers, respond to incentives. Funding agencies provide implicit incentives when they specify the rules by which awards are made. The following analysis is an exercise in understanding incentives at an applied level. Specific rules are examined and analyzed to determine their incentive effects. For example, what is the effect of rewarding past effort? What happens when a few large awards are replaced by many small awards? How does the timing of an award affect effort? How does an agency choose which topics to fund? After having mapped out the responses of researchers to rules, socially optimal rules are derived. Research incentive issues have private business analogues, and the extension to the operation of the firm is discussed briefly.

Suggested Citation

  • Edward P. Lazear, 1996. "Incentives in Basic Research," NBER Working Papers 5444, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:5444
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    Cited by:

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    2. Nicola Lacetera, 2009. "Different Missions and Commitment Power in R&D Organizations: Theory and Evidence on Industry-University Alliances," Organization Science, INFORMS, vol. 20(3), pages 565-582, June.
    3. Louise Keely, 2001. "Using Patents In Growth Models," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 10(6), pages 449-492.
    4. Carayol, Nicolas & Dalle, Jean-Michel, 2007. "Sequential problem choice and the reward system in Open Science," Structural Change and Economic Dynamics, Elsevier, vol. 18(2), pages 167-191, June.
    5. Sam Arts & Reinhilde Veugelers, 2020. "Taste for science, academic boundary spanning, and inventive performance of scientists and engineers in industry," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 29(4), pages 917-933.
    6. 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.
    7. Carillo, Maria Rosaria & Papagni, Erasmo, 2014. "“Little Science” and “Big Science”: The institution of “Open Science” as a cause of scientific and economic inequalities among countries," Economic Modelling, Elsevier, vol. 43(C), pages 42-56.
    8. Craig Andrea & Vierø Marie-Louise, 2013. "Academia or the Private Sector? Sorting of Agents into Institutions and an Outside Sector," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 13(1), pages 303-345, December.
    9. Maria Rosaria Carillo & Erasmo Papagni, 2004. "Incentive Structure In Basic Research And Economic Growth," Working Papers 9_2004, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
    10. Poblete, Joaquín & Spulber, Daniel, 2017. "Managing innovation: Optimal incentive contracts for delegated R&D with double moral hazard," European Economic Review, Elsevier, vol. 95(C), pages 38-61.
    11. A. Abigail Payne, 2003. "The Effects of Congressional Appropriation Committee Membership on the Distribution of Federal Research Funding to Universities," Economic Inquiry, Western Economic Association International, vol. 41(2), pages 325-345, April.
    12. Yin, Wesley, 2009. "R&D policy, agency costs and innovation in personalized medicine," Journal of Health Economics, Elsevier, vol. 28(5), pages 950-962, September.
    13. Kealey, Terence & Ricketts, Martin, 2014. "Modelling science as a contribution good," Research Policy, Elsevier, vol. 43(6), pages 1014-1024.
    14. Chudnovsky, Daniel & López, Andrés & Rossi, Martín & Ubfal, Diego, 2006. "Evaluating a Program of Public Funding of Scientific Activity: A Case Study of FONCYT in Argentina," IDB Publications (Working Papers) 2831, Inter-American Development Bank.
    15. Naomi Hausman, 2012. "University Innovation, Local Economic Growth, and Entrepreneurship," Working Papers 12-10, Center for Economic Studies, U.S. Census Bureau.
    16. Martin Kolmar & Andreas Wagener, 2012. "Contests and the Private Production of Public Goods," Southern Economic Journal, John Wiley & Sons, vol. 79(1), pages 161-179, July.
    17. Maria Rosaria Carillo & Erasmo Papagni & Fabian Capitanio, 2008. "Effects of social interactions on scientists' productivity," International Journal of Manpower, Emerald Group Publishing Limited, vol. 29(3), pages 263-279, June.
    18. Henry Sauermann & Wesley M. Cohen, 2010. "What Makes Them Tick? Employee Motives and Firm Innovation," Management Science, INFORMS, vol. 56(12), pages 2134-2153, December.
    19. Maria Rosaria Carillo & Erasmo Papagni, 2006. "Social Rewards in Science and Economic Growth," Discussion Papers 10_2006, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
    20. Maria Rosaria Carillo & Erasmo Papagni, 2004. "Academic Research, Social Interactions And Economic Growth," Working Papers 10_2004, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
    21. Alberto Batinti, 2016. "NIH biomedical funding: evidence of executive dominance in swing-voter states during presidential elections," Public Choice, Springer, vol. 168(3), pages 239-263, September.
    22. Goldfarb, Brent, 2008. "The effect of government contracting on academic research: Does the source of funding affect scientific output," Research Policy, Elsevier, vol. 37(1), pages 41-58, February.
    23. Hrvoje Matakovic & Mirjana Pejic Bach & Iva Radocaj Novak, 2013. "Scientific Productivity in Transition Countries: Trends and Obstacles," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 11(2), pages 174-189.
    24. S. Keith Berry, 2006. "Firm Incentives for Invention Prizes with Multiple Winners," Eastern Economic Journal, Eastern Economic Association, vol. 32(1), pages 83-95, Winter.
    25. Morley Gunderson, 2010. "Edward P. Lazear," Chapters, in: Ross B. Emmett (ed.), The Elgar Companion to the Chicago School of Economics, chapter 8, Edward Elgar Publishing.

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    More about this item

    JEL classification:

    • D00 - Microeconomics - - General - - - General
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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