Diversification and information in contests

Jorge Lemus and Emil Temnyalov ()
Additional contact information
Emil Temnyalov: University Technology Sydney Business School

Economic Theory, 2024, vol. 78, issue 1, No 9, 263-294

Abstract: Abstract We study contests with technological uncertainty, where contestants can invest in different technologies of uncertain value. The principal, who is also uncertain about the value of the technologies, can disclose an informative yet noisy public signal about the merit of each technology. The signal can focus contestants’ investments into more promising technologies or increase diversification. We characterize the principal’s optimal disclosure of information about the technologies, which depends on the value of diversification, the informativeness of available signals, and the ex-ante beliefs of the likelihood of success for each technology. We also find that under some conditions offering larger prizes or having more contestants decreases the extent of information disclosure.

Keywords: Contests; Innovation; Diversification; Information (search for similar items in EconPapers)
JEL-codes: C72 D62 D72 D83 O32 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s00199-023-01532-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: Diversification and Information in Contests (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:joecth:v:78:y:2024:i:1:d:10.1007_s00199-023-01532-x

Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/199/PS2

DOI: 10.1007/s00199-023-01532-x

Access Statistics for this article

Economic Theory is currently edited by Nichoals Yanneils

More articles in Economic Theory from Springer, Society for the Advancement of Economic Theory (SAET) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().