Letina, Igor; Schmutzler, Armin (2019). Inducing Variety: A Theory of Innovation Contests. International economic review, 60(4), pp. 1757-1780. Wiley 10.1111/iere.12403
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This article 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.
Item Type: |
Journal Article (Original Article) |
|---|---|
Division/Institute: |
03 Faculty of Business, Economics and Social Sciences > Department of Economics 03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics > Microeconomics |
UniBE Contributor: |
Letina, Igor |
Subjects: |
300 Social sciences, sociology & anthropology > 330 Economics |
ISSN: |
1468-2354 |
Publisher: |
Wiley |
Language: |
English |
Submitter: |
Dino Collalti |
Date Deposited: |
15 Apr 2020 08:39 |
Last Modified: |
05 Dec 2022 15:35 |
Publisher DOI: |
10.1111/iere.12403 |
BORIS DOI: |
10.7892/boris.138741 |
URI: |
https://boris.unibe.ch/id/eprint/138741 |
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