IDEAS home Printed from https://ideas.repec.org/p/rtv/ceisrp/448.html
   My bibliography  Save this paper

How to Set Budget Caps for Competitive Grants

Author

Listed:

Abstract

We study how funding agencies should set budget caps for competitive grants. We show that budget caps influence the researchers' submission strategy and, in particular, whether they steer their project choice towards the agencies' favorite projects, and the level of funds they request. The welfare impact of alternative approaches depends on the level of competition, the cost of public funds and the social value of project implementation.

Suggested Citation

  • Alessandro De Chiara & Elisabetta Iossa, 2019. "How to Set Budget Caps for Competitive Grants," CEIS Research Paper 448, Tor Vergata University, CEIS, revised 24 Jan 2019.
  • Handle: RePEc:rtv:ceisrp:448
    as

    Download full text from publisher

    File URL: https://ceistorvergata.it/RePEc/rpaper/RP448.pdf
    File Function: Main text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Varian, Hal R, 1980. "A Model of Sales," American Economic Review, American Economic Association, vol. 70(4), pages 651-659, September.
    2. Gianni Fraja, 2016. "Optimal public funding for research: a theoretical analysis," RAND Journal of Economics, RAND Corporation, vol. 47(3), pages 498-528, August.
    3. Maarten Janssen & Eric Rasmusen, 2002. "Bertrand Competition Under Uncertainty," Journal of Industrial Economics, Wiley Blackwell, vol. 50(1), pages 11-21, March.
    4. Mark Armstrong & John Vickers, 2010. "A Model of Delegated Project Choice," Econometrica, Econometric Society, vol. 78(1), pages 213-244, January.
    5. Elazar Berkovitch, 2004. "Why the NPV Criterion does not Maximize NPV," The Review of Financial Studies, Society for Financial Studies, vol. 17(1), pages 239-255.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Iossa, Elisabetta & De Chiara, Alessandro, 2019. "Public Procurement as a Demand-side Policy: Project Competition and Innovation Incentives," CEPR Discussion Papers 13664, C.E.P.R. Discussion Papers.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mark Armstrong & John Vickers, 2018. "Patterns of Competition with Captive Customers," Economics Series Working Papers 864, University of Oxford, Department of Economics.
    2. Alfredo Martín-Oliver & Vicente Salas-Fumás & Jesús Saurina, 2005. "Interest rate dispersion in deposit and loan markets," Working Papers 0506, Banco de España.
    3. Schmidbauer, Eric, 2019. "Budget selection when agents compete," Journal of Economic Behavior & Organization, Elsevier, vol. 158(C), pages 255-268.
    4. Janssen, Maarten C.W. & Roy, Santanu, 2010. "Signaling quality through prices in an oligopoly," Games and Economic Behavior, Elsevier, vol. 68(1), pages 192-207, January.
    5. Michael R. Baye & John Morgan, 2009. "Brand and Price Advertising in Online Markets," Management Science, INFORMS, vol. 55(7), pages 1139-1151, July.
    6. Paul Belleflamme & Wing Man Wynne Lam & Wouter Vergote, 2019. "Competitive Imperfect Price Discrimination and Market Power," CESifo Working Paper Series 7964, CESifo.
    7. De Chiara, Alessandro & Elizalde, Idoia & Manna, Ester & Segura-Moreiras, Adrian, 2021. "Car accidents in the age of robots," International Review of Law and Economics, Elsevier, vol. 68(C).
    8. Mark Armstrong & John Vickers, 2022. "Patterns of Competitive Interaction," Econometrica, Econometric Society, vol. 90(1), pages 153-191, January.
    9. Fabra, Natalia & Reguant, Mar, 2020. "A model of search with price discrimination," European Economic Review, Elsevier, vol. 129(C).
    10. Michael R. Baye & John Morgan, 2005. "Probabilistic Patents," Microeconomics 0504004, University Library of Munich, Germany.
    11. Paul Belleflamme & Wing Man Wynne Lam, & Wouter Vergote, 2020. "Competitive Imperfect Price Discrimination and Market Power," Marketing Science, INFORMS, vol. 39(5), pages 996-1015, September.
    12. Armstrong, Mark & Vickers, John, 2020. "Patterns of Price Competition and the Structure of Consumer Choice," MPRA Paper 98346, University Library of Munich, Germany.
    13. Paul Belleflamme & Wing Man Wynne Lam & Wouter Vergote, 2017. "Price Discrimination and Dispersion under Asymmetric Profiling of Consumers," Working Papers halshs-01502452, HAL.
    14. Gregorio Curello & Ludvig Sinander, 2020. "Screening for breakthroughs," Papers 2011.10090, arXiv.org, revised Feb 2024.
    15. Edwards, Robert A. & Routledge, Robert R., 2022. "Information, Bertrand–Edgeworth competition and the law of one price," Journal of Mathematical Economics, Elsevier, vol. 101(C).
    16. Atayev, Atabek, 2022. "Uncertain product availability in search markets," Journal of Economic Theory, Elsevier, vol. 204(C).
    17. Marceau, Nicolas & Mongrain, Steeve, 2011. "Competition in law enforcement and capital allocation," Journal of Urban Economics, Elsevier, vol. 69(1), pages 136-147, January.
    18. Jianqiang Zhang & Weijun Zhong & Shue Mei, 2012. "Competitive effects of informative advertising in distribution channels," Marketing Letters, Springer, vol. 23(3), pages 561-584, September.
    19. Raymond J. Deneckere & Dan Kovenock, 1988. "Capacity-Constrained Price Competition When Unit Costs Differ," Discussion Papers 861, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    20. Anindya Ghose & Tridas Mukhopadhyay & Uday Rajan, 2007. "The Impact of Internet Referral Services on a Supply Chain," Information Systems Research, INFORMS, vol. 18(3), pages 300-319, September.

    More about this item

    Keywords

    Competitive Grants; Procurement of Innovation; Project Choice; Research Funding; Research Tournament;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    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:rtv:ceisrp:448. See general information about how to correct material in RePEc.

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Barbara Piazzi (email available below). General contact details of provider: https://edirc.repec.org/data/csrotit.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.