An Economic Theory of Academic Competition: Dynamic Incentives and Endogenous Cumulative Advantages

Abstract

This paper provides a simple dynamic model of academic competition. Overlap- ping generations of researchers compete for first junior and next senior positions offered by universities which are also competing to hire the best scientists. Research positions have idio- syncratic associated productivities across universities and time because agents benefit from between-generations and within-universities positive externalities and from the accumulated reputation of the employing university. This feature is intended to capture the Matthew effect in science which designates the cumulative advantages affecting academic production. We derive equilibrium scientists' efforts, wages and long run endogenous accumulative ad- vantage.