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 project analysis which ignores the agency problem will introduce a bias towards excessively risky projects.

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.