Arbeitspapier
Inducing variety: A theory of innovation contests
This paper analyzes the design of innovation contests when the quality of an innovation depends on the research approach, but the best approach is unknown. Inducing a variety of research approaches generates an option value. We show that suitable contests can induce such variety. The buyer-optimal contest is a bonus tournament, where suppliers can choose only between a low bid and a high bid. This contest implements the socially optimal variety for a suitable parameter range. Finally, we compare the optimal contest to scoring auctions and fixed-prize tournaments.
- Sprache
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Englisch
- Erschienen in
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Series: Working Paper ; No. 200
Transactional Relationships; Contracts and Reputation; Networks
Firm Organization and Market Structure
Organization of Production
tournaments
auctions
diversity
innovation
procurement
Schmutzler, Armin
- DOI
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doi:10.5167/uzh-111830
- Handle
- Letzte Aktualisierung
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12.07.2024, 13:20 MESZ
Objekttyp
- Arbeitspapier
Beteiligte
- Letina, Igor
- Schmutzler, Armin
- University of Zurich, Department of Economics
Entstanden
- 2019