Improving the Peer review process: Capturing more information and enabling high-risk/high-return research

摘要

The Black-Scholes model and the peer-review process are combined to offer more insight into the apparent value of research projects. In doing so high-risk/high-return research is found to be more attractive and financially rational than under the traditional peer review approach. In other words projects with the highest disagreement amongst panel members should sometimes be selected even though the average panel score may not be the highest under consideration. This finding is important as it improves the existing peer review process by utilizing not only the mean value of peer reviews, but also their standard deviation. This note also opens the consideration of the potential of Real Options approaches for decision support for project selection and management of research.