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Innovation Contests

David Perez-Castrillo and David Wettstein ()

No 654, Working Papers from Barcelona School of Economics

Abstract: We study innovation contests with asymmetric information and identical contestants, where contestants' efforts and innate abilities generate inventions of varying qualities. The designer offers a reward to the contestant achieving the highest quality and receives the revenue generated by the innovation. We characterize the equilibrium behavior, outcomes and payoffs for both nondiscriminatory and discriminatory (where the reward is contestant-dependent) contests. We derive conditions under which the designer obtains a larger payoff when using a discriminatory contest and describe settings where these conditions are satisfied.

Keywords: contests; Auctions; innovations; discrimination (search for similar items in EconPapers)
JEL-codes: D44 J71 O31 (search for similar items in EconPapers)
Date: 2012-08
New Economics Papers: this item is included in nep-cta, nep-ino, nep-mic and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Working Paper: Innovation Contests (2014) Downloads
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