IDEAS home Printed from https://ideas.repec.org/a/aea/aejmic/v12y2020i4p270-89.html

Some searches may not work properly. We apologize for the inconvenience.

   My bibliography  Save this article

Designing Dynamic Research Contests

Author

Listed:
  • Jean-Michel Benkert
  • Igor Letina

Abstract

This paper studies the optimal design of dynamic research contests. We introduce interim transfers, which are paid in every period while the contest is ongoing, to an otherwise standard setting. We show that a contest where (i) the principal can stop the contest in any period, (ii) a constant interim transfer is paid to agents in each period while the contest is ongoing, and (iii) a final prize is paid once the principal stops the contest, is optimal for the principal and implements the first-best.

Suggested Citation

  • Jean-Michel Benkert & Igor Letina, 2020. "Designing Dynamic Research Contests," American Economic Journal: Microeconomics, American Economic Association, vol. 12(4), pages 270-289, November.
    • Handle: RePEc:aea:aejmic:v:12:y:2020:i:4:p:270-89
    DOI: 10.1257/mic.20180263
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/mic.20180263
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/mic.20180263.ds
    Download Restriction: no
    File URL: https://libkey.io/10.1257/mic.20180263?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Igor Letina, 2016. "The road not taken: competition and the R&D portfolio," RAND Journal of Economics, RAND Corporation, vol. 47(2), pages 433-460, May.
    2. Benny Moldovanu & Aner Sela, 2008. "The Optimal Allocation of Prizes in Contests," Springer Books, in: Roger D. Congleton & Arye L. Hillman & Kai A. Konrad (ed.), 40 Years of Research on Rent Seeking 1, pages 615-631, Springer.
    3. Gershkov, Alex & Perry, Motty, 2009. "Tournaments with midterm reviews," Games and Economic Behavior, Elsevier, vol. 66(1), pages 162-190, May.
    4. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603, Decembrie.
    5. Kevin J. Boudreau & Karim R. Lakhani & Michael Menietti, 2016. "Performance responses to competition across skill levels in rank-order tournaments: field evidence and implications for tournament design," RAND Journal of Economics, RAND Corporation, vol. 47(1), pages 140-165, February.
    6. Qiang Fu & Jingfeng Lu, 2012. "The optimal multi-stage contest," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 51(2), pages 351-382, October.
    7. Igor Letina & Armin Schmutzler, 2019. "Inducing Variety: A Theory Of Innovation Contests," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(4), pages 1757-1780, November.
    8. Yeon-Koo Che & Ian Gale, 2003. "Optimal Design of Research Contests," American Economic Review, American Economic Association, vol. 93(3), pages 646-671, June.
    9. Rieck, Thomas, 2010. "Information Disclosure in Innovation Contests," Bonn Econ Discussion Papers 16/2010, University of Bonn, Bonn Graduate School of Economics (BGSE).
    10. Christian Terwiesch & Yi Xu, 2008. "Innovation Contests, Open Innovation, and Multiagent Problem Solving," Management Science, INFORMS, vol. 54(9), pages 1529-1543, September.
    11. Clark, Derek J & Riis, Christian, 1996. "A Multi-winner Nested Rent-Seeking Contest," Public Choice, Springer, vol. 87(1-2), pages 177-184, April.
    12. David Pérez‐Castrillo & David Wettstein, 2016. "Discrimination In A Model Of Contests With Incomplete Information About Ability," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57, pages 881-914, August.
    13. Lang, Matthias & Seel, Christian & Strack, Philipp, 2014. "Deadlines in stochastic contests," Journal of Mathematical Economics, Elsevier, vol. 52(C), pages 134-142.
    14. Kevin J. Boudreau & Nicola Lacetera & Karim R. Lakhani, 2011. "Incentives and Problem Uncertainty in Innovation Contests: An Empirical Analysis," Management Science, INFORMS, vol. 57(5), pages 843-863, May.
    15. Emmanuel Dechenaux & Dan Kovenock & Roman Sheremeta, 2015. "A survey of experimental research on contests, all-pay auctions and tournaments," Experimental Economics, Springer;Economic Science Association, vol. 18(4), pages 609-669, December.
    16. Gal, Shmuel & Landsberger, Michael & Levykson, Benny, 1981. "A Compound Strategy for Search in the Labor Market," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(3), pages 597-608, October.
    17. Richard L. Fullerton & Bruce G. Linster & Michael McKee & Stephen Slate, 2002. "Using Auctions To Reward Tournament Winners: Theory and Experimental Investigations," RAND Journal of Economics, The RAND Corporation, vol. 33(1), pages 62-84, Spring.
    18. Hendon, Ebbe & Jacobsen, Hans Jorgen & Sloth, Birgitte, 1996. "The One-Shot-Deviation Principle for Sequential Rationality," Games and Economic Behavior, Elsevier, vol. 12(2), pages 274-282, February.
    19. Taylor, Curtis R, 1995. "Digging for Golden Carrots: An Analysis of Research Tournaments," American Economic Review, American Economic Association, vol. 85(4), pages 872-890, September.
    20. Kruse, Thomas & Strack, Philipp, 2015. "Optimal stopping with private information," Journal of Economic Theory, Elsevier, vol. 159(PB), pages 702-727.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Matros, Alexander & Ponomareva, Natalia & Smirnov, Vladimir & Wait, Andrew, 2022. "Search without looking," Journal of Economic Dynamics and Control, Elsevier, vol. 139(C).
    2. Dmitry Ryvkin, 2022. "To Fight or to Give Up? Dynamic Contests with a Deadline," Management Science, INFORMS, vol. 68(11), pages 8144-8165, November.
    3. Th'eo Durandard, 2023. "Dynamic delegation in promotion contests," Papers 2308.05668, arXiv.org.
    4. Letina, Igor & Liu, Shuo & Netzer, Nick, 2023. "Optimal contest design: Tuning the heat," Journal of Economic Theory, Elsevier, vol. 213(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Letina, Igor & Benkert, Jean-Michel, 2016. "Designing Dynamic Research Tournaments," VfS Annual Conference 2016 (Augsburg): Demographic Change 145738, Verein für Socialpolitik / German Economic Association.
    2. Enzo Brox & Daniel Goller, 2024. "Tournaments, Contestant Heterogeneity and Performance," Papers 2401.05210, arXiv.org.
    3. Pavel Kireyev, 2016. "Markets for Ideas: Prize Structure, Entry Limits, and the Design of Ideation Contests," Harvard Business School Working Papers 16-129, Harvard Business School.
    4. Nicolas de Roos & Alexander Matros & Vladimir Smirnov, 2024. "Elimination tournaments with resource constraints," Working Papers 2024-06, University of Sydney, School of Economics.
    5. Kaplan, Todd R. & Zamir, Shmuel, 2015. "Advances in Auctions," Handbook of Game Theory with Economic Applications,, Elsevier.
    6. Daniel P. Gross, 2017. "Performance feedback in competitive product development," RAND Journal of Economics, RAND Corporation, vol. 48(2), pages 438-466, May.
    7. Jürgen Mihm & Jochen Schlapp, 2019. "Sourcing Innovation: On Feedback in Contests," Management Science, INFORMS, vol. 65(2), pages 559-576, February.
    8. Segev, Ella, 2020. "Crowdsourcing contests," European Journal of Operational Research, Elsevier, vol. 281(2), pages 241-255.
    9. Kostas Bimpikis & Shayan Ehsani & Mohamed Mostagir, 2019. "Designing Dynamic Contests," Operations Research, INFORMS, vol. 67(2), pages 339-356, March.
    10. Xu Tian & Gongbing Bi, 2022. "Multiplicative output form and its applications to problems in the homogenous innovation contest model," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 44(3), pages 709-732, September.
    11. Llorente-Saguer, Aniol & Sheremeta, Roman M. & Szech, Nora, 2023. "Designing contests between heterogeneous contestants: An experimental study of tie-breaks and bid-caps in all-pay auctions," European Economic Review, Elsevier, vol. 154(C).
    12. Subhasish M. Chowdhury & Patricia Esteve‐González & Anwesha Mukherjee, 2023. "Heterogeneity, leveling the playing field, and affirmative action in contests," Southern Economic Journal, John Wiley & Sons, vol. 89(3), pages 924-974, January.
    13. Michael Babington & Sebastian J. Goerg & Carl Kitchens, 2020. "Do Tournaments With Superstars Encourage or Discourage Competition?," Journal of Sports Economics, , vol. 21(1), pages 44-63, January.
    14. Ming Hu & Lu Wang, 2021. "Joint vs. Separate Crowdsourcing Contests," Management Science, INFORMS, vol. 67(5), pages 2711-2728, May.
    15. Koh, Youngwoo, 2017. "Incentive and sampling effects in procurement auctions with endogenous number of bidders," International Journal of Industrial Organization, Elsevier, vol. 52(C), pages 393-426.
    16. Letina, Igor & Liu, Shuo & Netzer, Nick, 2023. "Optimal contest design: Tuning the heat," Journal of Economic Theory, Elsevier, vol. 213(C).
    17. Llorente-Saguer, Aniol & Sheremeta, Roman & Szech, Nora, 2016. "Designing Contests Between Heterogeneous Contestants: An Experimental Study of Tie-Breaks and Bid-Caps in All-Pay Auctions," MPRA Paper 71202, University Library of Munich, Germany.
    18. Giebe, Thomas, 2014. "Innovation contests with entry auction," Journal of Mathematical Economics, Elsevier, vol. 55(C), pages 165-176.
    19. Hu, Feng & Bijmolt, Tammo H.A. & Huizingh, Eelko K.R.E., 2020. "The impact of innovation contest briefs on the quality of solvers and solutions," Technovation, Elsevier, vol. 90.
    20. Pavel Kireyev, 2020. "Markets for ideas: prize structure, entry limits, and the design of ideation contests," RAND Journal of Economics, RAND Corporation, vol. 51(2), pages 563-588, June.

    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejmic:v:12:y:2020:i:4:p:270-89. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.