A Model of Challenge Funds: Funding Availability, Selection Rigor, and Project Quality

25 Pages Posted: 30 Nov 2021

See all articles by Raphael Boleslavsky

Raphael Boleslavsky

University of Miami - School of Business Administration - Department of Economics

Bruce Carlin

Rice University

Christopher Cotton

Queen's University, Department of Economics

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Abstract

Challenge funds (CF) induce competition between grant applicants as they develop proposals to address important social problems. We develop a game theoretic model to study how funding availability and proof of concept requirements (e.g., pilots or other forms of early stage screening) influence investments by applicants and the ultimate success of the CF. Larger budgets and more rigorous proof of concept requirements can reduce applicant investments and lead to less effective funding initiatives. The results show how the design of a CF affects the incentives of those competing for funding, and how the most effective CF design needs to carefully consider how the NGOs or researchers applying for funding will respond to a change in incentives. Otherwise, steps taken to improve the quantity or quality of funded projects can backfire and decrease overall funding effectiveness.

Keywords: grants, funding allocation, pilot studies, evaluation, evidence production

Suggested Citation

Boleslavsky, Raphael and Carlin, Bruce and Cotton, Christopher, A Model of Challenge Funds: Funding Availability, Selection Rigor, and Project Quality. Available at SSRN: https://ssrn.com/abstract=3973340 or http://dx.doi.org/10.2139/ssrn.3973340

Raphael Boleslavsky

University of Miami - School of Business Administration - Department of Economics ( email )

P.O. Box 248126
Coral Gables, FL 33124-6550
United States

Bruce Carlin

Rice University ( email )

6100 South Main Street
Houston, TX 77005-1892
United States

Christopher Cotton (Contact Author)

Queen's University, Department of Economics ( email )

Dunning Hall 230
Kingston, Ontario K7L 3N6
Canada

HOME PAGE: http://www.christophercotton.ca

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