This study argues that portfolio theory can provide a powerful tool to make research funding decisions. The proposed methodology allows for an informed management decision process, also in the presence of project interdependencies and multiple policy objectives. Despite its potential to improve funding decisions, the portfolio model is not widely applied in practice. The most common approach is merit-based funding where the evaluators’ scores of the individual proposals guide funding decisions. A possible explanation is that conventions play a role in the selection process. Survey data show that policy practitioners working in the field of research and innovation policy have a relatively strong preference for the merit-based funding model, suggesting the presence of a “club-effect”.

We investigate the effects of monetary compensation on the duration of voluntary work, on donations, and on market labor income of paid volunteers using data from German income tax returns. In recent decades, volunteering has expanded from completely unpaid work to the possibility of receiving small (tax-free) monetary compensations for the activities performed. However, the effects of monetary incentives in the context of prosocial behavior are likely to differ from effects on paid work in the labor market. Our empirical analysis leverages a German policy change from 2013 that increased the tax-free threshold for volunteer compensations. We combine difference-in-differences and matching strategies with a duration analysis model to investigate the effects of changes in volunteer compensation on volunteers working as instructors or educators. This allows us to identify the dominant mechanism behind paid volunteers’ optimal choices for volunteering, market labor, and donations.

We examine the problem of voluntary participation in negotiations regarding the provision of public goods. In contrast to earlier studies, in our model, a negotiation is followed by renegotiations. First, players decide whether to participate in a negotiation, and the participants produce a public good. The participants then renegotiate the level of the public good with nonparticipants in the preceding negotiations. We show that with these renegotiation opportunities, many players may participate in providing the public good in the preceding negotiation. In some cases, all players participate in the preceding negotiation and the public good is produced efficiently. Our findings indicate that more players participate in the provision of public goods if they have strong bargaining power in the renegotiations. Hence, this problem may not be as severe as reported by previous studies. Our results may be consistent with the recent developments in voluntary projects for international river management.