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- Title
Setting the Budget for Targeted Research Projects.
- Authors
De Chiara, Alessandro; Iossa, Elisabetta
- Abstract
We consider a funding competition for targeted projects. Potential participants have stochastic opportunity costs, and do not know the number of competitors. The funding agency sets a budget cap indicating the maximum funding that participants may request. We show that raising the budget cap helps to attract more participants but causes an increase in the requested funds. A higher budget cap is optimal when the preferences of researchers and the funding agency are more congruent, competition is lower, targeted projects have larger social value, the cost of public funds is smaller, or bidding preparation costs are lower.
- Subjects
BUDGET cuts; OPPORTUNITY costs; SOCIAL values; FINANCE
- Publication
B.E. Journal of Economic Analysis & Policy, 2021, Vol 21, Issue 3, p1013
- ISSN
2194-6108
- Publication type
Article
- DOI
10.1515/bejeap-2020-0347