‘Contest models highlight inherent inefficiencies of scientific funding competitions’

Author summary: The grant proposal system compels researchers to devote substantial time to writing proposals that could have instead been used to do science. Here, we use the economic theory of contests to show that as fewer grants are funded, the value of the science that researchers forgo while preparing proposals can approach or exceed the value of the science that the funding program supports. As a result, much of the scientific impact of the funding program is squandered. Unfortunately, increased waste and reduced efficiency is inevitable in a grant proposal competition when the number of awards is small. How can scarce funds be allocated efficiently, then? As one alternative, we show that a partial lottery that selects proposals for funding randomly from among those that pass a qualifying standard can restore lost efficiency by reducing investigators’ incentives to invest heavily in preparing proposals. Lotteries could also improve efficiency by compelling administrators to de-emphasize grant success as a primary measure of professional achievement. If lotteries are politically untenable, another remedy would be to fund researchers based on their previous research successes, although in such a way that avoids establishing barriers to entry for junior scientists or scientists from historically underrepresented demographic groups.

Gross K, Bergstrom CT (2019) Contest models highlight inherent inefficiencies of scientific funding competitions. PLoS Biol 17(1): e3000065. https://doi.org/10.1371/journal.pbio.3000065.

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