The implications of competitive bidding between universities and other institutes for research funding are examined. It is shown that this process of competitive rent-seeking can absorb research resources of similar magnitude to the research funds available. A basic model involving two similar ‘universities’ is set out initially. It is then shown that the overall cost of the research bidding process increases with (i) an increase in the number of bidders, (ii) an increase in the care with research proposals are scrutinized, and (iii) a decline in the dispersion of costs of proposal generation.