In a moral hazard model with relationship-speci?c investment (?hay?) and limited liability (no ?stick?), we compare two institutional regimes: one without, and one with, ex-post incentives (?carrot?). We examine the welfare implications of introducing ?carrots?. We use this model to analyze...

This paper aims to shed light on the division of labor among types of research sponsors and among universities. It interprets data on grants and contracts as conveying information on the sponsorsÂ’ objectives and on the nature of the sponsored institutions. Building on this idea, the paper...