Uncertainty and Individual Discretion in Allocating Research Funds

39 Pages Posted: 7 Aug 2017 Last revised: 31 Jan 2020

See all articles by Anna Goldstein

Anna Goldstein

University of Massachusetts Amherst - Department of Mechanical and Industrial Engineering

Michael Kearney

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: February 28, 2018

Abstract

There is a long-standing tradition in public research funding agencies of distributing funds via peer review, which aggregates evaluations of proposed research ideas from a group of external experts. Despite complaints that this process is biased against novel ideas, there is poor understanding of an alternative system that may overcome this bias: the use of individual discretion. Here, we conduct the first quantitative study of how individual discretion affects a research funding portfolio. Using internal project selection data from the Advanced Research Projects Agency-Energy (ARPA-E), we describe how a portfolio of projects selected by individual discretion differs from a portfolio of projects selected by traditional peer review. We show that ARPA-E program directors prefer to fund proposals with greater disagreement among experts, especially if at least one reviewer thinks highly of the proposal. This preference leads ARPA-E to fund more uncertain and creative research ideas, which supports the agency’s mission of pursuing novel ideas for transformational energy technology.

Keywords: research funding, project selection, peer review, uncertainty, innovation

Suggested Citation

Goldstein, Anna and Kearney, Michael, Uncertainty and Individual Discretion in Allocating Research Funds (February 28, 2018). Available at SSRN: https://ssrn.com/abstract=3012169 or http://dx.doi.org/10.2139/ssrn.3012169

Anna Goldstein (Contact Author)

University of Massachusetts Amherst - Department of Mechanical and Industrial Engineering ( email )

160 Governors Drive
Amherst, MA 01003

Michael Kearney

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

77 Massachusetts Ave. E62-663
Cambridge, MA 02142
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
36
Abstract Views
193
PlumX Metrics