Innovation Contests with Entry Auction

Arbeitspapier

We consider procurement of an innovation from heterogeneous sellers. Innovations are random but depend on unobservable effort and private information. We compare two procurement mechanisms where potential sellers first bid in an auction for admission to an innovation contest. After the contest, an innovation is procured employing either a fixed prize or a first-price auction. We characterize Bayesian Nash equilibria such that both mechanisms are payoff-equivalent and induce the same efforts and innovations. In these equilibria, signaling in the entry auction does not occur since contestants play a simple strategy that does not depend on rivals' private information.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SFB/TR 15 Discussion Paper ; No. 307

Classification and Topics

• Classification: Wirtschaft ; Firm Behavior: Theory ; Auctions ; Asymmetric and Private Information; Mechanism Design ; National Government Expenditures and Related Policies: Procurement ; Innovation and Invention: Processes and Incentives ; Management of Technological Innovation and R&D
• Subject: Contest ; Auction ; Innovation ; Research ; R\&D ; Procurement ; Signaling ; Innovationswettbewerb ; Auktionstheorie ; Beschaffung ; Signalling ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Giebe, Thomas
• Event: Veröffentlichung
• (who): Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
• (where): München
• (when): 2010

Further information

• DOI: doi:10.5282/ubm/epub.13247
• Handle: http://hdl.handle.net/10419/94125
• URN: urn:nbn:de:bvb:19-epub-13247-1
• Last update: 10.03.2025, 11:44 AM CET