Optimal Design of Research Contests
Top Cited Papers
Open Access
- 1 May 2003
- journal article
- Published by American Economic Association in American Economic Review
- Vol. 93 (3) , 646-671
- https://doi.org/10.1257/000282803322157025
Abstract
Procurement of an innovation often requires substantial effort by potential suppliers. Motivating effort may be difficult if the level of effort and quality of the resulting innovation are unverifiable, if innovators cannot benefit directly by marketing their innovations, and if the buyer cannot extract up-front payments from suppliers. We study the use of contests to procure an innovation in such an environment. An auction in which two suppliers are invited to innovate and then bid their prizes is optimal in a large class of contests. If contestants are asymmetric, it is optimal to handicap the most efficient one.Keywords
All Related Versions
This publication has 22 references indexed in Scilit:
- Using Auctions to Reward Tournament Winners: Theory and Experimental InvestigationsThe RAND Journal of Economics, 2002
- Unobservable Investment and the Hold-Up ProblemEconometrica, 2001
- Auctionin Entry into TournamentsJournal of Political Economy, 1999
- Cooperative Investments and the Value of ContractingAmerican Economic Review, 1999
- Optimal auction design and R&DEuropean Economic Review, 1997
- Formal and Real Authority in OrganizationsJournal of Political Economy, 1997
- Design Competition Through Multidimensional AuctionsThe RAND Journal of Economics, 1993
- An Incomplete Contracts Approach to Financial ContractingThe Review of Economic Studies, 1992
- The Costs and Benefits of Ownership: A Theory of Vertical and Lateral IntegrationJournal of Political Economy, 1986
- Sealed Bids, Sunk Costs, and the Process of CompetitionThe Journal of Business, 1984