Fixed-Prinz Tournaments versus First-Price Auctions in Innovation Contests

This paper analyzes a procurement setting with identical ﬁrms and stochastic innovations. In contrast to the previous literature, I show that a procurer who cannot charge entry fees may prefer a ﬁxed-prize tournament to a ﬁrst-price auction. The reason is that holding an auction may leave higher rents to ﬁrms when the innovation technology is subject to large random actors.

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Year of publication:	2006-12-14
Authors:	Schöttner, Anja
Publisher:	Universität <Berlin, Humboldt-Universität>
Subject:	Vermittlung \| Innovationswettbewerb

Table of Contents
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1. Introduction
2. The model
3. Firms' decisions
4. The buyer's problem
5. Extensions
6. Conclusion

Persistent link: https://www.econbiz.de/10005857923