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

This paper analyzes a procurement setting with two identical firms and stochasticinnovations. 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:	2005-08-09
Authors:	Schöttner, Anja
Institutions:	Sonderforschungsbereich Ökonomisches Risiko <Berlin>
Subject:	Innovation \| Wettbewerb \| market microstructure

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Extent:	373760 bytes 22 p. application/pdf
Series:	Sonderforschungsbereich 649: Ökonomisches Risiko - Diskussionspapiere Diskussionspapier ; 2005-041
Type of publication:	Book / Working Paper
Language:	English
Classification:	D44 - Auctions ; H57 - Procurement ; L15 - Information and Product Quality; Standardization and Compatibility ; Forecast, decision making ; Individual Working Papers, Preprints ; No country specification
Source:	USB Cologne (business full texts)

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