How to Set Budget Caps for Competitive Grants

13 Pages Posted: 31 Jan 2019

See all articles by Alessandro De Chiara

Alessandro De Chiara

Central European University (CEU) - Department of Economics; University of Barcelona; University of Barcelona - Barcelona Economic Analysis Team (BEAT)

Elisabetta Iossa

University of Rome Tor Vergata; IEFE Bocconi University; Centre for Economic Policy Research (CEPR)

Date Written: November 15, 2018

Abstract

We study how funding agencies should set budget caps for competitive grants. We show that budget caps influence the researchers' submission strategy and, in particular, whether they steer their project choice towards the agencies' favorite projects, and the level of funds they request. The welfare impact of alternative approaches depends on the level of competition, the cost of public funds and the social value of project implementation.

Keywords: Competitive Grants, Procurement of Innovation, Project Choice, Research Funding, Research Tournament

JEL Classification: D8, O25, O30, O31, O38, L2

Suggested Citation

De Chiara, Alessandro and Iossa, Elisabetta, How to Set Budget Caps for Competitive Grants (November 15, 2018). CEIS Working Paper No. 448, Available at SSRN: https://ssrn.com/abstract=3321298 or http://dx.doi.org/10.2139/ssrn.3321298

Alessandro De Chiara

Central European University (CEU) - Department of Economics ( email )

Nador u. 9.
Budapest H-1051
Hungary

University of Barcelona ( email )

Gran Via de les Corts Catalanes, 585
Barcelona, 08007
Spain

University of Barcelona - Barcelona Economic Analysis Team (BEAT) ( email )

Gran Via de les Corts Catalanes
Barcelona, 08007
Spain

Elisabetta Iossa (Contact Author)

University of Rome Tor Vergata ( email )

Via Columbia n.2
Rome, 00133
Italy

IEFE Bocconi University ( email )

Via Roentgen 1
Milan, Milan 20136
Italy

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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