AbstractThe process of innovation is driven by two main factors: new inventions and institutions supporting the transformation of inventions into marketable innovations. This paper proposes a new institution, called a semi- public contest, that has been neglected by the economic literature but exists frequently in practice. I show how semi-public contests can mitigate a dilemma that arises at a very early stage of innovative activity and specify the general requirements for situations in which a semi-public contest can increase welfare. This paper's results suggest that governments promote knowledge about the semi-public contest mechanism but refrain from direct public funding of contests.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2009-33.
Date of creation: 2009
Date of revision:
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Web page: http://center.uvt.nl
Innovation; Contests; Entrepreneurs; Institutional Design; Business Plan Competitions; Auctions;
Other versions of this item:
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-30 (All new papers)
- NEP-CTA-2009-05-30 (Contract Theory & Applications)
- NEP-ENT-2009-05-30 (Entrepreneurship)
- NEP-INO-2009-05-30 (Innovation)
- NEP-IPR-2009-05-30 (Intellectual Property Rights)
- NEP-PPM-2009-05-30 (Project, Program & Portfolio Management)
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