22,556 research outputs found
How to Allocate R&D (and Other) Subsidies: An Experimentally Tested Policy Recommendation
This paper evaluates how R&D subsidies to the business sector are typically awarded. We identify two sources of ine_ciency: the selection based on a ranking of individual projects, rather than complete allocations, and the failure to induce competition among applicants in order to extract and use information about the necessary funding. In order to correct these ine_- ciencies we propose mechanisms that include some form of an auction in which applicants bid for subsidies. Our proposals are tested in a simulation and in controlled lab experiments. The results suggest that adopting our proposals may considerably improve the allocation
How to Allocate R&D (and Other) Subsidies: An Experimentally Tested Policy Recommendation
This paper evaluates how R&D subsidies to the business sector are typically awarded. We identify two sources of ine_ciency: the selection based on a ranking of individual projects, rather than complete allocations, and the failure to induce competition among applicants in order to extract and use information about the necessary funding. In order to correct these ine_- ciencies we propose mechanisms that include some form of an auction in which applicants bid for subsidies. Our proposals are tested in a simulation and in controlled lab experiments. The results suggest that adopting our proposals may considerably improve the allocation.Research; Subsidies; Experimental Economics
Incentives and Efficiency in Uncertain Collaborative Environments
We consider collaborative systems where users make contributions across
multiple available projects and are rewarded for their contributions in
individual projects according to a local sharing of the value produced. This
serves as a model of online social computing systems such as online Q&A forums
and of credit sharing in scientific co-authorship settings. We show that the
maximum feasible produced value can be well approximated by simple local
sharing rules where users are approximately rewarded in proportion to their
marginal contributions and that this holds even under incomplete information
about the player's abilities and effort constraints. For natural instances we
show almost 95% optimality at equilibrium. When players incur a cost for their
effort, we identify a threshold phenomenon: the efficiency is a constant
fraction of the optimal when the cost is strictly convex and decreases with the
number of players if the cost is linear
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