The Role of Budget Contraints in Sequential Elimination Tournaments

Malin Arve and Olga Chiappinelli

No 1777, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: Motivated by the EU concept of Pre-Commercial Procurement and the massivepresence of SMEs in the European economy, we study how budget constraints affect R&D effort in sequential elimination tournaments. We show that introducingbudget constraints leads to a non-monotonicity in unconstrained contestants' effort.Furthermore, we show that if the budget asymmetry is not too large, unconstrainedcontestants exert higher effort than when faced with unconstrained contestants only.

Keywords: Pre-commercial procurement; contests; budget constraints (search for similar items in EconPapers)
JEL-codes: D72 H57 (search for similar items in EconPapers)
Pages: 41 p.
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The Role of Budget Constraints in Sequential Elimination Tournaments (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp1777

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