Tactical Refereeing and Signaling by Publishing

ABSTRACT Peer review is usually conducted to allocate limited resources, such as the budget of a funder or the pages of a journal. Limited capacity may bias peer evaluations, precisely because approving a peer's worthy project consumes capacity, jeopardizing the referee's own project's chances. I show that limiting capacity is inconsistent with a hypothesis that the decision‐maker desires to stimulate efforts. I show that the desire to strengthen the signaling message of the acceptance decision could lead to limiting the capacity, endogenously creating a tragedy of informational commons problem.