Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • April 2023
  • Article
  • Research Policy

The Subjective Expected Utility Approach and a Framework for Defining Project Risk in Terms of Novelty and Feasibility—A Response to Franzoni and Stephan (2023), ‘Uncertainty and Risk-Taking in Science’

By: Jacqueline N. Lane
  • Format:Print
  • | Pages:7
ShareBar

Abstract

In their Discussion Paper, Franzoni and Stephan (F&S, 2023) discuss the shortcomings of existing peer review models in shaping the funding of risky science. Their discussion offers a conceptual framework for incorporating risk into peer review models of research proposals by leveraging the Subjective Expected Utility (SEU) approach to decouple reviewers’ assessments of a project’s potential value from its risk. In my Response, I build on F&S’s discussion and attempt to shed light on three additional yet core considerations of risk in science: 1) how risk and reward in science are related to assessments of a project’s novelty and feasibility; 2) how the sunk cost literature can help articulate why reviewers tend to perceive new research areas as riskier than continued investigation of existing lines of research; and 3) how drawing on different types of expert reviewers (i.e., based on domain and technical expertise) can result in alternative evaluation assessments to better inform resource allocation decisions. The spirit of my Response is to sharpen our understanding of risk in science and to offer insights on how future theoretical and empirical work—leveraging experiments— can test and validate the SEU approach for the purposes of funding more risky science that advances the knowledge frontier.

Keywords

Risk and Uncertainty; Research; Resource Allocation; Perception

Citation

Lane, Jacqueline N. "The Subjective Expected Utility Approach and a Framework for Defining Project Risk in Terms of Novelty and Feasibility—A Response to Franzoni and Stephan (2023), ‘Uncertainty and Risk-Taking in Science’." Art. 104707. Research Policy 52, no. 3 (April 2023).
  • Read Now

About The Author

Jacqueline Ng Lane

Technology and Operations Management
→More Publications

More from the Author

    • September–October 2024
    • Organization Science

    The Crowdless Future? Generative AI and Creative Problem-Solving

    By: Léonard Boussioux, Jacqueline N. Lane, Miaomiao Zhang, Vladimir Jacimovic and Karim R. Lakhani
    • 2025
    • Faculty Research

    Narrative AI and the Human-AI Oversight Paradox in Evaluating Early-Stage Innovations

    By: Jacqueline N. Lane, Léonard Boussioux, Charles Ayoubi, Ying Hao Chen, Camila Lin, Rebecca Spens, Pooja Wagh and Pei-Hsin Wang
    • May–June 2024
    • Organization Science

    Setting Gendered Expectations? Recruiter Outreach Bias in Online Tech Training Programs

    By: Jacqueline N. Lane, Karim R. Lakhani and Roberto Fernandez
More from the Author
  • The Crowdless Future? Generative AI and Creative Problem-Solving By: Léonard Boussioux, Jacqueline N. Lane, Miaomiao Zhang, Vladimir Jacimovic and Karim R. Lakhani
  • Narrative AI and the Human-AI Oversight Paradox in Evaluating Early-Stage Innovations By: Jacqueline N. Lane, Léonard Boussioux, Charles Ayoubi, Ying Hao Chen, Camila Lin, Rebecca Spens, Pooja Wagh and Pei-Hsin Wang
  • Setting Gendered Expectations? Recruiter Outreach Bias in Online Tech Training Programs By: Jacqueline N. Lane, Karim R. Lakhani and Roberto Fernandez
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College.