Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/145738
Authors: 
Letina, Igor
Benkert, Jean-Michel
Year of Publication: 
2016
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2016: Demographischer Wandel - Session: Competition and Tournaments C04-V3
Abstract: 
This paper considers the optimal design of dynamic research tournaments when the buyer can set time-dependent prizes. We derive the buyer-optimal tournament and show that it entails an increasing prize schedule. Remarkably, this allows the buyer to implement a global stopping rule. In particular, the optimal tournament attains the first-best. More generally, we show that global stopping rules can be implemented robustly and compare them to individual stopping rules which have been analyzed in the existing literature. We conclude by discussing policy implications of our findings and highlight that global stopping rules combine the best aspects of innovation races and fixed prize tournaments.
JEL: 
O32
D02
L19
Document Type: 
Conference Paper

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