Individuals involved in basic research, like other workers, respond to incentives. Funding agencies provide implicit … responses of researchers to rules, socially optimal rules are derived. Research incentive issues have private business analogues …

. Theory has identified three primary ways that the investor / principal can mitigate these conflicts - structuring financial … work and its relation to theory for one prominent class of principals venture capitalists (VCs). The empirical studies … indicate that VCs attempt to mitigate principal-agent conflicts in the three ways suggested by theory. The evidence also shows …