Before revision:  We derive the benefits of a discovery on decision making. A researcher maximizes the benefits of discovery net the cost of research. We characterize the researcher's optimal choice of research question and research effort. Benefits and cost of research crucially depend on the structure of pre-existing knowledge.
After revision:  We derive the benefits of discoveries are non-monotone in novelty. Nevertheless, due to a dynamic externality, it can be optimal to incentivize research on distant discoveries to improve the evolution of knowledge. One reason is that the probability of a discovery and the novelty of the question are endogenously linked. They can be complements or substitutes depending on existing knowledge.