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
Authors:	Schöttner, Anja
Publisher:	Berlin : Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk
Subject:	innovation contest \| auction \| tournament \| quality

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Series:	SFB 649 Discussion Paper ; 2005,041
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	501723919 [GVK] hdl:10419/25050 [Handle]
Classification:	D44 - Auctions ; H57 - Procurement ; L15 - Information and Product Quality; Standardization and Compatibility
Source:	EconStor

Persistent link: https://www.econbiz.de/10010263592