Research and Teaching Targets in Academia

We develop a model to study how to set optimal targets on research and teaching. Heterogeneous academics respond to targets decided by a head of department whose objective is to maximize the overall research and teaching output. Our approach consists in formalizing targets as reference points that are neither determined by expectations nor imposed by academics themselves, but rather set by an external agent, the head of department. Complementarity and substitutability between research and teaching, the academics’ productivity, and the department's composition are crucial determinants in setting the targets optimally. We consider some examples to study the effects of targets on academics’ welfare, the case of personalized targets, and departments' specialization in research or teaching when academics can move across different universities.