Uncertainty and Individual Discretion in Allocating Research Funds
33 Pages Posted: 7 Aug 2017
Date Written: May 30, 2017
The Advanced Research Projects Agency – Energy (ARPA-E) was created in the model of the Defense Advanced Research Projects Agency (DARPA) to pursue high-risk and transformational energy innovation. Both ARPA-E and DARPA emphasize the autonomy of program staff to make decisions, including which proposed projects to fund. To date, there have been no quantitative studies of how the use of individual discretion impacts the research portfolio, compared to more traditional ranking of peer review scores. Using internal program data from 2009 to 2015, we examine the determinants of project selection and the short-term productivity of ARPA-E projects in terms of publishing, patenting, and market engagement.
Our key findings are:
1) ARPA-E program directors use significant discretion,
2) their choices result in a portfolio with greater collective uncertainty than other selection methods, and
3) there is no evidence that this use of discretion has reduced the quality of ARPA-E’s research portfolio.
Keywords: research funding, project selection, peer review, uncertainty, innovation
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