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

This paper analyzes a procurement setting with two 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 since holding an auction may leave higher rents to firms when the innovation technology is subject to large random factors.

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Year of publication:	2005-08
Authors:	Schöttner, Anja
Institutions:	Sonderforschungsbereich 649: Ökonomisches Risiko, Wirtschaftswissenschaftliche Fakultät
Subject:	innovation contest \| auction \| tournament \| quality

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Extent:	application/pdf
Series:	SFB 649 Discussion Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number SFB649DP2005-041 22 pages
Classification:	D44 - Auctions ; H57 - Procurement ; L15 - Information and Product Quality; Standardization and Compatibility
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005677987