Signaling Game for Research Fund Allocation in Thailand

Abstract

This study proposed a signaling game for a research grant allocation situation. A funding agency and a researcher whose type was kept secret from the funding agency were the players in the game. The agency decided the grant amount to fund the researcher. The results show that a pooling equilibrium existed when the difference between a large and small fund was sufficiently large, and the expected costs of failing the large-fund project for both types were small, whereas the expected costs of failing the small-fund project for both types were large. When the difference between the effort of putting up a project proposal between a large-fund project and a small-fund project was relatively small, pooling equilibrium occurred. Nevertheless, a separating equilibrium occurred in which the good researcher requested a large fund and the bad researcher requested a small fund when the expected cost of failing the large-fund project for the bad researcher was sufficiently large, whereas the expected cost of failing the large-fund project for the good researcher was sufficiently small. On the basis of the research impact assessment of previous studies, a case study was examined. According to the results, we were still in a pooling equilibrium. However, if some model parameters changed (e.g., when the estimated cost of a penalty to the bad researcher was increased), a separating equilibrium began to show.