Some Tradeoffs of Competition in Grant Contests

TL;DR

This paper investigates how competition in grant contests influences scientists' effort, showing that effort directed towards fundraising can have inherent scientific value, thus not necessarily reducing research effort.

Contribution

It combines survey data analysis with theoretical models to demonstrate that socially valuable effort in grant contests can alter traditional views on competition's effects.

Findings

Scientists' fundraising effort has inherent scientific value.

Increased competition can lead to socially valuable effort.

Effort externalities can improve overall research productivity.

Abstract

When funding public goods, resources are often allocated via mechanisms that resemble contests, especially in the case of research grants. A common critique of these contests is that they induce ``too much'' effort from participants. This need not be true if the effort in the contest is itself directed towards the public good. This papers analyzes survey data on scientists' time use and finds that scientists allocate their time in a way that is consistent with fundraising effort (e.g., grant writing) having inherent scientific value -- scientists who spend more time fundraising do not spent significantly less time on research even after conditioning on confounding factors. Theoretical models of contests are used to show that the presence of such a positive effort externality, where scientists generate social value when pursuing grants, changes the relationship between competition and the aggregate productivity of a grant contest. Ensuring that scientists exert socially valuable effort to obtain grants is increasingly important as grant contests become more competitive.