Order-Dependent Knowledge and the Economics of Science

Economists approaching the study of science typically assume the applicability of a market analogy, but then base their analysis on the presumption that science constitutes an area of pervasive market failure. Given the interactions that are actually observed to occur between scientists, we suspect that the failure is in the analogy, not in the putative market. In considering how one might better apply the economic way of thinking to the understanding of science as an activity, we suggest that it is necessary to specify exactly how scientific interaction differs from market interaction, and to be clear about how the behavior of interacting scientists might be modeled in terms of the general pursuit of self-interest in a noncatallactic context. Our model of science portrays an institutionalized mode of interaction between scientists involving the publication, use, and citation of scientific papers, and it is in the exploration of the individual incentives thrown up by this arrangement that the interesting empirical implications arise. We give a short exposition of the possible lines of investigation that could be followed based on this approach.