How to Set Budget Caps for Competitive Grants

De Chiara AlessandroIossa Elisabetta
CEIS Research Paper
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.

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Number: 448
Keywords: Competitive Grants, Procurement of Innovation, Project Choice, Research Funding, Research Tournament
JEL codes: D8,O25,O30,O31,O38,L2
Volume: 17
Issue: 1
Date: Thursday, January 24, 2019
Revision Date: Thursday, January 24, 2019