Fixed-prize tournaments versus first-price auctions in innovation contests
This paper analyzes a procurement setting with two identical firms and stochastic innovations. In contrast to the previous literature, I show that a procurer who cannot charge entry fees may prefer a fixed-prize tournament to a first-price auction since holding an auction may leave higher rents to firms when the innovation technology is subject to large random factors.
(This abstract was borrowed from another version of this item.)
Volume (Year): 35 (2008)
Issue (Month): 1 (April)
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