Social rewards in science and economic growth
In this paper we put forward a model of basic research and long-run economic growth in which the incentives of social reward to scientific work may produce increasing returns and multiple equilibria. The state organizes production of new knowledge - a public good that improves firms' technology - with taxes on the private sector. Scientists compete with one another to attain priority over a discovery and be awarded both a real prize and prestige in the scientific community. Also, scientists\ derive job motivation from dedication to science which provides social status. Analysis of the model shows, on the one hand, a low equilibrium where the economy is endowed with a small science sector, researchers have high relative income but low prestige, and competition for discoveries is weak. On the other hand, there is a high equilibrium where the economy has a large science sector, scientists obtain for new findings high prestige but lower relative salaries and, as the effect of creative destruction is strong, there is fierce competition among researchers. Comparative statics shows that if the scientific infrastructure is poor, policies that increase the marginal benefits from a discovery have perverse effects, while policies aimed at improving the selection mechanism of researchers work well. \ The same policies have opposite effects at the high steady state.
|Date of creation:||28 Mar 2007|
|Date of revision:|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Medio, Alfredo & Raines, Brian, 2007. "Backward dynamics in economics. The inverse limit approach," Journal of Economic Dynamics and Control, Elsevier, vol. 31(5), pages 1633-1671, May.
- Carillo, Maria Rosaria & Papagni, Erasmo & Capitanio, Fabian, 2007.
"Effects of social interactions on scientists' productivity,"
7880, University Library of Munich, Germany.
- Maria Rosaria Carillo & Erasmo Papagni & Fabian Capitanio, 2008. "Effects of social interactions on scientists' productivity," International Journal of Manpower, Emerald Group Publishing, vol. 29(3), pages 263-279, July.
- Maria Rosaria Carillo & Erasmo Papagni & Fabian Capitanio, 2006. "Effects of social interactions on Scientists’ productivity," Discussion Papers 19_2006, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
- Aghion, P. & Howitt, P., 1990.
"A Model Of Growth Through Creative Destruction,"
DELTA Working Papers
90-12, DELTA (Ecole normale supérieure).
- Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," Working papers 527, Massachusetts Institute of Technology (MIT), Department of Economics.
- Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
- Philippe Aghion & Peter Howitt, 1990. "A Model of Growth Through Creative Destruction," NBER Working Papers 3223, National Bureau of Economic Research, Inc.
- Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," UWO Department of Economics Working Papers 8904, University of Western Ontario, Department of Economics.
- Cooper, Ben & Garcia-Penalosa, Cecilia & Funk, Peter, 2001.
"Status Effects and Negative Utility Growth,"
Royal Economic Society, vol. 111(473), pages 642-65, July.
- Dasgupta, Partha & David, Paul, 1985. "Information Disclosure and the Economics of Science and Technology," CEPR Discussion Papers 73, C.E.P.R. Discussion Papers.
- Joshua Aizenman & Ilan Noy, 2007.
"Prizes for basic research: Human capital, economic might and the shadow of history,"
Journal of Economic Growth,
Springer, vol. 12(3), pages 261-282, September.
- Ilan Noy & Joshua Aizenman, 2007. "Prizes for Basic Research -- Human Capital, Economic Might and the Shadow of History," Working Papers 200705, University of Hawaii at Manoa, Department of Economics.
- Joshua Aizenman & Ilan Noy, 2006. "Prizes for Basic Research -- Human Capital, Economic Might and the Shadow of History," NBER Working Papers 12226, National Bureau of Economic Research, Inc.
- Fershtman, C. & Murphy, K.M., 1993.
"Social Status, Education and Growth,"
8-93, Tel Aviv.
- Mansfield, Edwin, 1991. "Academic research and industrial innovation," Research Policy, Elsevier, vol. 20(1), pages 1-12, February.
- Paul Romer, 1989.
"Endogenous Technological Change,"
NBER Working Papers
3210, National Bureau of Economic Research, Inc.
- Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
- Edward P. Lazear, 1996.
"Incentives in Basic Research,"
NBER Working Papers
5444, National Bureau of Economic Research, Inc.
- Cole, Harold L & Mailath, George J & Postlewaite, Andrew, 1992. "Social Norms, Savings Behavior, and Growth," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1092-1125, December.
- Philippe Aghion & Mathias Dewatripont & Jeremy C. Stein, 2005.
"Academic Freedom, Private-Sector Focus, and the Process of Innovation,"
Harvard Institute of Economic Research Working Papers
2089, Harvard - Institute of Economic Research.
- 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.
- Stein, Jeremy C. & Dewatripont, Mathias & Aghion, Philippe, 2008. "Academic Freedom, Private-Sector Focus, and the Process of Innovation," Scholarly Articles 3637074, Harvard University Department of Economics.
- Philippe Aghion & Mathias Dewatripont & Jeremy C. Stein, 2005. "Academic Freedom, Private-Sector Focus, and the Process of Innovation," NBER Working Papers 11542, National Bureau of Economic Research, Inc.
- Grandmont, Jean-Michel, 1985.
"On Endogenous Competitive Business Cycles,"
Econometric Society, vol. 53(5), pages 995-1045, September.
- Weiss, Y. & Fershtman, C., 1997.
"Social Status and Economic Performance: A Survey,"
19-97, Tel Aviv.
- Yoram Weiss & Chaim Fershtman, 1997. "Social Status and Economic Performance: A Survey," University of Chicago - George G. Stigler Center for Study of Economy and State 139, Chicago - Center for Study of Economy and State.
- Stephan, Paula E., 2010.
"The Economics of Science,"
Handbook of the Economics of Innovation,
- Carlo Carraro & Domenico Siniscalco, 2003. "Science Versus Profit in Research," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 576-590, 04/05.
- Adams, James D, 1990. "Fundamental Stocks of Knowledge and Productivity Growth," Journal of Political Economy, University of Chicago Press, vol. 98(4), pages 673-702, August.
- Mansfield, Edwin, 1995. "Academic Research Underlying Industrial Innovations:," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 55-65, February.
- Li Lian Ong & Jason Mitchell, 2000. "Professors and hamburgers: an international comparison of real academic salaries," Applied Economics, Taylor & Francis Journals, vol. 32(7), pages 869-876.
- Arthur M. Diamond Jr., 1986. "What is a Citation Worth?," Journal of Human Resources, University of Wisconsin Press, vol. 21(2), pages 200-215.
- Karl Shell, 2010. "A Model of Inventive Activity and Capital Accumulation," Levine's Working Paper Archive 1409, David K. Levine.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:2776. 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: (Joachim Winter)
If references are entirely missing, you can add them using this form.