Contracting with Researchers

Matthias Verbeck () and Elisabeth Schulte ()
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Matthias Verbeck: University of Marburg

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: We study a setting in which one or two agents conduct research on behalf of a principal. The agents’ success depends on effort and the choice of a research technology that is uncertain with respect to its quality. A single agent has no incentive to deviate from the principal’s preferred technology choice. In the multiagent-setting researchers pursue individual rather than overall success which yields a preference for the most promising technology. We show that a mechanism that deters this bias towards mainstream research always entails an efficiency loss if researchers are risk-averse. Our results suggest that there is too little diversity in delegated research.

Keywords: Moral hazard; Hidden action; Incentives in teams; Delegated research; Academic organization; Diversity in research (search for similar items in EconPapers)
JEL-codes: D82 D83 D86 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2016
New Economics Papers: this item is included in nep-cta, nep-hme and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:201620

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