Arbeitspapier
Designing institutions for diversity
This paper analyzes the design of innovation contests when the quality of an innovation depends on the research approach of the supplier, but the best approach is unknown. Diversity of approaches is beneficial because of the resulting option value. An auction induces the social optimum, while a fixed-prize tournament induces insufficient diversity. The optimal contest for the buyer is an augmented fixed-prize tournament, where suppliers can choose from a set of at most two prizes. This allows the buyer to implement any level of diversity at the lowest cost.
- Language
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Englisch
- Bibliographic citation
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Series: Working Paper ; No. 200
- Classification
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Wirtschaft
Transactional Relationships; Contracts and Reputation; Networks
Firm Organization and Market Structure
Organization of Production
- Subject
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contests
tournaments
auctions
diversity
procurement
- Event
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Geistige Schöpfung
- (who)
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Letina, Igor
Schmutzler, Armin
- Event
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Veröffentlichung
- (who)
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University of Zurich, Department of Economics
- (where)
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Zurich
- (when)
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2015
- DOI
-
doi:10.5167/uzh-111830
- Handle
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Letina, Igor
- Schmutzler, Armin
- University of Zurich, Department of Economics
Time of origin
- 2015
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