Contracting with Researchers

We study a setting in which one or two agents conduct research on behalf of a principal. The agents' success depends on effort and the choice of a research technology that is uncertain with respect to its quality. A single agent has no incentive to deviate from the principal's preferre...

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Bibliographic Details
Published in:MAGKS - Joint Discussion Paper Series in Economics (Band 20-2016)
Main Authors: Verbeck, Matthias, Schulte, Elisabeth
Format: Article
Language:English
Published: Philipps-Universität Marburg 2016
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Online Access:PDF Full Text
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Summary:We study a setting in which one or two agents conduct research on behalf of a principal. The agents' success depends on effort and the choice of a research technology that is uncertain with respect to its quality. A single agent has no incentive to deviate from the principal's preferred technology choice. In the multiagent-setting researchers pursue individual rather than overall success which yields a preference for the most promising technology. We show that a mechanism that deters this bias towards mainstream research always entails an effciency loss if researchers are risk-averse. Our results suggest that there is too little diversity in delegated research.
Physical Description:49 Pages
ISSN:1867-3678
DOI:10.17192/es2024.0497