Incentive Design

Innovation can be shaped through carefully designed incentives, including prizes, advance market commitments, pay-for-outcomes procurement, and funding of research and development.

We study approaches for improving the alignment incentives for innovation for firms with what is most beneficial for social welfare. Such “market shaping” approaches include governments or philanthropists paying for outcomes, advance market commitments, and income sharing agreements where workforce training programs are paid based on the improvement in worker income. Our work on measurement is integrally connected to the success of market shaping, since reliable measures of relevant outcomes are essential to ensure that firm payments are aligned with societal goals.

Project Abstracts

Read about a few of the research projects the lab is currently working on.

Accelerating Health Technology Innovation to Address COVID-19

Accelerating the development of health technology such as treatments, diagnostics, and vaccines is crucial to ending the COVID-19 crisis as quickly as possible. This project evaluates alternative methods for speeding up the process, including the design of incentives for development and manufacturing, as well as approaches for optimizing clinical trials using shared control groups and adaptive experiments.


Designing a Pay-for-Outcomes Initiative

Along with Harvard University’s Center for Educational Policy Research and Laurence Holt, the lab is part of a project in the initial phase of designing a pay-for-outcomes initiative to improve learning for children in K-12. The group has received a planning grant. This initiative will unlock R&D investment on learning outcomes in the U.S. K-12 market such as middle years algebra readiness.