The Sky is the Limit: The Bias against Large Projects

In science and innovation, a key challenge lies in the evaluation of projects with uncertain outcomes. In this paper, we study how the resource requirements attached to projects influence project evaluations. Specifically, we argue that decision-makers are biased against large projects, i.e., projects that require a lot of resources to be implemented. We provide evidence of such a bias in the context of the peer review process of the European Southern Observatory (ESO), an intergovernmental organization that operates one of the largest ground-based observatories around the world and that is in charge of allocating valuable telescope time to academic astronomers. We find that evaluators systematically give worse scores to large proposals, even after accounting for proposal quality and productivity as well as applicant characteristics. We confirm our findings with an instrumental variable estimation, and show that a bias against large projects comes at the cost of breakthrough research. The evaluation patterns we observe suggest that the bias against large projects is largely driven by evaluators' inequity aversion.

Johanna Schnier joined KLU as PhD candidate in September 2019. She is supervised by Prof. Dr. Christina Raasch and Prof. Dr. Prisca Brosi. With her research she contributes to the project “Idea evaluation in open, democratized innovation” funded by the German Research Foundation. Johanna investigates how idea evaluators assess innovative ideas, with a particular focus on potential idea evaluation biases created by social ties, incentives and social comparison between idea creator and idea evaluator. Johanna holds degrees from the universities of Kiel (M.Sc. Economics) and Jena (B.Sc. Economics & Business Administration, B.A. Sociology). She worked as a research assistant at the Kiel Institute for the World Economy and the Max Planck Institue of Economics. Before joining KLU, she worked as Data Scientist with TUI.