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The Optimal Management of Research Portfolios

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  • Bardsley, P.

Abstract

Risky research projects are, other things being equal, intrinsically harder to monitor than those which are less risky. It is shown, using agency theory that a standard cost benefit analysis which ignores the agency problem will introduce a bias towards excessively risky projects.

Suggested Citation

  • Bardsley, P., 1997. "The Optimal Management of Research Portfolios," Department of Economics - Working Papers Series 549, The University of Melbourne.
    • Handle: RePEc:mlb:wpaper:549
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    References listed on IDEAS

    as
    1. HOLMSTROM, Bengt, 1979. "Moral hazard and observability," LIDAM Reprints CORE 379, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. Jock R. Anderson & Philip G. Pardey & Johannes Roseboom, 1994. "Sustaining growth in agriculture: a quantitative review of agricultural research investments," Agricultural Economics, International Association of Agricultural Economists, vol. 10(2), pages 107-123, April.
    3. George W. Norton & Jeffrey S. Davis, 1981. "Evaluating Returns to Agricultural Research: A Review," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(4), pages 685-699.
    4. Grossman, Sanford J & Hart, Oliver D, 1983. "An Analysis of the Principal-Agent Problem," Econometrica, Econometric Society, vol. 51(1), pages 7-45, January.
    5. Bardsley, P., 1997. "Multiple Action Agency: An Application to the Management of Scientific Research," Department of Economics - Working Papers Series 550, The University of Melbourne.
    6. Kenneth J. Arrow & Robert C. Lind, 1974. "Uncertainty and the Evaluation of Public Investment Decisions," Palgrave Macmillan Books, in: Chennat Gopalakrishnan (ed.), Classic Papers in Natural Resource Economics, chapter 3, pages 54-75, Palgrave Macmillan.
    7. Bengt Holmstrom, 1979. "Moral Hazard and Observability," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 74-91, Spring.
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    Citations

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    Cited by:

    1. Stoneham, Gary & Strappazzon, Loris & Soligo, James & Fisher, Bill & Eigenraam, Mark & Wimalasuriya, Rukman, 2000. "Evaluation Of Research Activities," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 123645, Australian Agricultural and Resource Economics Society.
    2. Susan Xu Tang & Yongsheng Xu, 2024. "Multiple prizes for multiple tasks: externalities and the optimal design of tournaments," Journal of Economics, Springer, vol. 142(3), pages 291-303, August.
    3. X. Zhao & J.D. Mullen & G.R. Griffith & R.R. Piggott & W.E. Griffiths, 2002. "The Economic Incidence of R&D and Promotion Investments in the Australian Beef Industry," Monash Econometrics and Business Statistics Working Papers 16/02, Monash University, Department of Econometrics and Business Statistics.
    4. Kingwell, Ross S., 1999. "Institutional and social influences on R&D evaluation in agriculture," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 43(1), pages 1-14, March.
    5. Omuru, Eric & Kingwell, Ross S., 2005. "Funding and Managing Agricultural Research in a Developing Country: a Papua New Guinea case study," 2005 Conference (49th), February 9-11, 2005, Coff's Harbour, Australia 137938, Australian Agricultural and Resource Economics Society.
    6. Bert Lenaerts & Yann de Mey & Matty Demont, 2022. "Revisiting multi‐stage models for upstream technology adoption: Evidence from rapid generation advance in rice breeding," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(1), pages 277-300, February.

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    More about this item

    Keywords

    MANAGEMENT; RESEARCH AND DEVELOPMENT;

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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