Contracting with Researchers

Matthias Verbeck

VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy from Verein für Socialpolitik / German Economic Association

Abstract: We study a setting in which one or two agents conduct research on behalf of a principal. The agents binary performance level (suc- cess or failure) depends on their invested research e ort, and their choice of a research technology that is uncertain in respect of its apt- ness to generate a success. While in the single-agent-setting the agent has no incentive to deviate from the principal s preferred technology choice, this is not generally true for the multiagent-setting. When technologies are mutually exclusive - only one of them will be suit- able for yielding a high output - we show that there exists a contract that aligns the principal s and the agents interests. However, under the plausible assumption of scientists free technology choice, our re- sults suggest that there is a bias towards mainstream-research: Agents choose promising technologies more often than socially optimal.

JEL-codes: D82 D83 D86 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-hme, nep-hrm and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc15:112963

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