Partha Dasgupta and Paul David open their article suggesting that economics literature has, "lacked an overarching conceptual framework to guide empirical studies and public policy discussions" about science. They attempt to unpack the reputation-based reward systems in science to help understand what the economic drivers are of scientific work and how public changes might influence those incentives and change science.

The basic argument is framed by three features of science:

* Borrowing from agency theory, scientific production and progress is very costly for outsiders to monitor.
* There are significant aspects of indivisibility, attendant fixed costs, and economies of scale inherent in the underlying processes of knowledge production.
* Knowledge created can be kept from the public if researcher choose.

The goals of the authors is to introduce an "economics of science" which:

* Exposes the logic of scientific institutions.
* Examines implications of different types of institutions on the efficiency of resources allocation within science.

The authors argue that difference between science and technology basically comes down to a different set of socio-political reward systems affecting the allocation of resources. In technology, work is kept secret and owned, in science, it is put into the public domain. They argue that because markets are reasonable bad at the second type of production (i.e., the production of a public good), either (1) governments can engage in science directly, (2) society can grant monopoly rights to scientific production, or (3) scientific production can be done through public subsidies but without exclusive rights being granted to the creators. The authors collapse (1) and (3) together and argue that are really two core economic means of encouraging scientific production.

Much of the core of the article then goes into depth on the priority system which is the system whereby the first person that publishes something gets all the fruits (usually the credit) for a particular discovery. It talks about the combination methods that most science works under where scientists get both rewards and a set salary, as a way of balancing the agency concerns. It goes into some high-level game theory to talk about the possible inefficiencies that stem from a priority based system.

The authors argue that because there are repeated games a strong norm-based system in science, many of the potential problems with inefficiency are addressed. That said, they point out there problems with sciences emphasis on who makes discoveries (which society does not care about) and timing effects related to coordination which the scientific incentive system makes hard and that central funding organizations may have trouble manipulating.

The paper also discusses the role that science plays in training individuals for the work force and in technology and industry and a series of other issues related to science and the economy before its closing section that discusses implications for policy.

The general policy implications are one of skepticism. The authors warn that the incentive system in science works well but that it is a delicate balance and that there is some evidence that minor changes (e.g., reducing the number of PhD students being produced or promoting transferability from universities to industry) may have unintended bad effects.

#### Theoretical and practical relevance:

The article was initially published in Research Policy but was subsequently re-published in the book Science bought and sold. The paper has been cited more than 1,400 times in the literature on science and innovation and innovation more broadly.