Essays on the Economics of Sponsored Research concerns the regulation of a firm conducting R&D under contract with a sponsor. Chapter 1 surveys the rich economics and policy literature concerned with R&D contracting. Prior to Balbien and Wilde (1980), the chief weakness of the literature was in the analysis of dynamic contracting incentives and the implications of information asymmetry between a researcher and sponsor.
Chapter 2 is an empirical essay describing R&D contracting by the Department of Defense. Based on a sample of DOD R&D contract data from 1979, several hypothesis are tested with multivariate statistics. These hypotheses concern the choice of generic contract type by sponsors, the effect of competition, and the performance of various contractual forms.
The third chapter analyzes a dynamic model of incrementally funded research which is descriptive in nature and not subject to direct econometric estimation. Nevertheless, it provides valuable insight into a firm's behavior in revealing research progress to a sponsor, through targets set over a sequence of research periods.
Chapter 4's essay focuses on the influence of various types of research assistance on a firm's internal investment in a number of private research projects.
