Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/96903
Authors: 
Pérez-Castrillo, David
Wettstein, David
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 4712
Abstract: 
We study innovation contests with asymmetric information and identical contestants, where contestants’ efforts and innate abilities generate inventions of varying qualities. The designer offers a reward to the contestant achieving the highest quality and receives the revenue generated by the innovation. We characterize the equilibrium behavior, outcomes and payoffs for both nondiscriminatory and discriminatory (where the reward is contestant-dependent) contests. We derive conditions under which the designer obtains a larger payoff when using a discriminatory contest and describe settings where these conditions are satisfied.
Subjects: 
contests
auctions
innovation
discrimination
JEL: 
O31
D44
J71
Document Type: 
Working Paper

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