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solution: High social value of applied research
solution: High social value of applied research
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A Theoretical Analysis of Public Funding for Research

содержание презентации «A Theoretical Analysis of Public Funding for Research.ppt»
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1A Theoretical Analysis of Public 14marginal cost of doing applied research is
Funding for Research. Gianni De Fraja the same as the marginal benefit. the
University of Leicester, Universit? di marginal cost of doing applied research is
Roma ‘Tor Vergata’ and CEPR. Higher School the same in every institution. efficient.
of Economics – Moscow 29 march 2012. This better institutions do more applied
paper studies government funding for research. it does not matter who does
scientific research. Funds must be basic.
distributed among different research 15perfect information. overall budget. ?
institutions and allocated between basic 16asymmetric information I. the
and applied research. Informational government cannot observe basic research
constraints prevent less productive why? the institution can “hide” it. the
institutions to be given any government government can only observe - a minimum
funding. In order to internalise the level of applied research - total research
beneficial effects of research, the expenditure Cor: If the government can
government requires the most productive observe , then exactly the same as with
institutions to carry out more applied perfect information. 16.
research than they would like. Funding for 17asymmetric information II. if the
basic research is used by the government government cannot observe basic research
to this end. & the government cannot observe. the
2macro. lots of government money spent above is not possible. each institution
on R&D. micro. way to pay for R&D has a marginal cost of applied research
who to pay for R&D what type of higher than the marginal cost of basic
R&D. 0.8% in OECD 0.2% in Mexico, 1.1% research. 17.
in Spain. 18asymmetric information II. use
3}. way to pay for R&D who to pay revelation principle ask each institution
for R&D what type of R&D. one to reveal its productivity commit to a
third. two thirds. many different policy as a function of the report it is
institutions. research grants: the top 25 not possible to increase payoff relative
universities received 85% quality related to the best policy which ensures
funding: the top 25 universities received truth-telling. 18.
75%. basic vs applied research. one fifth 19asymmetric information II. Prop: A
is basic research. some funding linked to policy is incentive compatible if: (i)
specific projects (research grant) some (ii) (iii) (iv). must be decreasing. 19.
funding given to institutions (block 20asymmetric information II: the
grant) some funding as a reward for past government’s problem. subject to:
success. 21asymmetric information II: the
4basic and applied research. driven by government’s problem. subject to:
scientists’ curiosity, its aim to acquire 22solution. define two functions: by:
knowledge for knowledge’s sake. designed by: 22.
to solve practical problems. Moody (1995) 23solution. 23.
on the CD Haustein (2009) on the sat-nav 24solution. 24.
Edelson (1992) on tiling and 25solution. is large. Prop:
superconductors du Satoy (2003) on Riemann 26solution: High social value of applied
hypothesis and credit card security. NSF: research. ? ? ? ?
“basic research is defined as systematic 27solution: High social value of applied
study directed toward fuller knowledge or research. Cor: ? ?
understanding of the fundamental aspects 28solution: High social value of applied
of phenomena and of observable facts research. ? ? ? ?
without specific applications towards 29implementation. the only thing
processes or products in mind.”. NSF: observed is the amount of applied
“applied research is defined as systematic research. a link between a target amount
study to gain knowledge or understanding of applied research carried out and the
necessary to determine the means by which total amount of funding an institution
a recognized and specific need may be receives.
met.”. 30implementation: High social value of
5model. link between basic and applied applied research. ? ?
research. government has information 31implementation: High social value of
disadvantage. government finances applied research. very high cost
institutions no difference between private institution. ? ? a. ? ? ? -type
and public institutions (Aghion et al. institution. B.
2008). government internalises externality 32implementation: High social value of
no individual externality (as in R&D applied research. middle cost institution.
done by firms) (Stephan 1996). ? ? a. ? ? ? -type institution. B. A.
hierarchical. more diffuse uncertainty. 33implementation: High social value of
for an applied research project, the applied research. low cost institution. ?
benefits can be ex-ante described, and ? a. ? ? ? -type institution. A. C.
ex-post measured. 34solution: High social value of applied
6results. inefficiency determined by research. ? ? ? ?
information disadvantage. basic research 35implementation: High social value of
used as a reward for doing applied applied research. very high cost
research. research is inefficiently institution. ? ? a. ? ? ? -type
concentrated. funding: better institutions institution. B.
receive more grants, and less block 36implementation: High social value of
funding. funding: full economic costing a applied research. middle cost institution.
bad idea; cost sharing (co-funding) is ? ? a. ? ? ? B. A.
preferable. 37implementation: High social value of
7the model. continuum of research applied research. low cost institution. ?
institutions. cost of converting funding ? a. ? ? ? B. C. A.
into results. 38a. ? The end. 1. full economic
8for a type institution, let. for costing? marginal cost of applied
society as a whole, let. amount of applied research. marginal funding for applied
research it does. amount of basic research research.
it does. total amount of applied research. 392. implementation: Low social value of
total amount of basic research. applied research. is (well) below 1.
9=1. effect of research. applied 402. implementation: Low social value of
research increases GDP. basic research applied research. is (well) below 1. ? a.
decreases cost of applied research. a ? ?
given basic project has no effect on a 41Thanks.
given project (basic or applied). diffuse. 42solution. 42.
10payoff functions. institutions. 43solution: low social value of applied
government. satisfying: for every. research. ? ? ? ?
11preliminaries. individually efficient 44solution: low social value of applied
applied research. lower. research. ? ? ? ?
12is decreasing. 45solution: low social value of applied
13perfect information. research. ? ? ? ?
14perfect information. the aggregate
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A Theoretical Analysis of Public Funding for Research

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