The Role of Deadlines in Grant Funding

Wen-Hao Wang
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Wen-Hao Wang: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: A grantmaker decides when to fund a project and how much funding to provide. In each period, an applicant who values funding privately observes the quality of a project. Funding is bounded and unrestricted transfers are not available. Acceptance ends the relationship. When first-best screening is not incentive compatible, every optimal policy has a deadline: if no high-quality project has been reported by then, the grantmaker accepts any project with full funding. When the applicant derives no benefit from a low-quality project, a deterministic policy is sufficient for optimality. An increasing funding schedule with a single application implements this policy.

Keywords: Grant funding; Dynamic mechanism design; Deadlines; Screening; Mechanism without money (search for similar items in EconPapers)
Date: 2026-10-26
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