KnowEvoIAndIdeasMkt · The Evolution of Knowledge in the Market for Ideas

The Evolution of Knowledge shapes our policy choices. Researchers decide what to research, with whom to collaborate, and how much to invest into discovery. While researchers enjoy institutionalized or implicit scientific freedom, two categories govern the researcher's decision which question to address and how much effort to exert: (i) prior knowledge and (ii) the market for ideas.Prior knowledge is vital to determine how knowledge evolves. Researchers stand on the shoulders of giants and use conjectures derived from previous discoveries when they address problems. They assess their ex ante prospects on finding an answer by looking at related findings. However, researchers also operate in the market for ideas. Careers depend on how marketable an idea is, how well researchers exploit synergies and complementarities with collaborators, what topics range high on the policy agenda, and what funding opportunities the researcher can access. In sum, how much effort the researcher invests depends crucially on the market for ideas.Our work combines these two aspects and proposes a flexible model to predict the researcher's choice and determine the evolution of knowledge over time. The model is set up with the data in mind to be able to derive meaningful counterfactuals. We can derive implications for designing the market for ideas, e.g., through adapting the funding architecture. We address questions such as: When should funding focus on cost reductions (e.g., grants), when on rewards (e.g., prizes)? When should we push for ""moonshot discoveries"" when for incremental research? Should researchers collaborate with experts on similar topics reducing coordination efforts, or with more distant ones exploiting complementarities? Should we let researchers compete on the same topic increasing the probability of finding a solution, or should we urge researchers to differentiate, increasing the number of questions covered?""