AbstractWe study innovation contests with asymmetric information and identical contestants, where contestants’ efforts and innate abilities generate inventions of varying qualities. The designer offers a reward to the contestant achieving the highest quality and receives the revenue generated by the innovation. We characterize the equilibrium behavior, outcomes and payoffs for both nondiscriminatory and discriminatory (where the reward is contestant-dependent) contests. We derive conditions under which the designer obtains a larger payoff when using a discriminatory contest and describe settings where these conditions are satisfied.
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Bibliographic InfoPaper provided by Barcelona Graduate School of Economics in its series Working Papers with number 654.
Date of creation: Aug 2012
Date of revision:
contests; auctions; innovations; discrimination;
Other versions of this item:
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-09 (All new papers)
- NEP-CTA-2012-09-09 (Contract Theory & Applications)
- NEP-INO-2012-09-09 (Innovation)
- NEP-MIC-2012-09-09 (Microeconomics)
- NEP-TID-2012-09-09 (Technology & Industrial Dynamics)
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