Agents compete to solve a problem. Each agent simultaneously chooses either a safe method or a risky method to solve the problem. This paper analyzes a prize scheme as an incentive to induce the optimal risk-taking level which maximizes the designerʼs interest. It is shown that whenever the...

This paper investigates how an office-motivated incumbent can use transparency enhancement on public spending to signal his budgetary management ability and win re-election. We show that, when the incumbent faces a popular challenger, transparency policy can be an effective signaling device. A...

This survey reviews the theoretical literature on high impact entrepreneurship. The survey is guided in part by the recent classification changes at the Journal of Economic Literature (JEL) regarding entrepreneurship. The board voted to create a new classification code, L26, for...

Empirical analyses show that the employment effects of start-ups are highest in agglomerations, whereas moderately congested areas exhibit only modest effects, and weak or even no significant effects could be found in rural regions. This paper will set out to show that these discrepancies arise...

We present results from a series of experiments that allow us to measure overbidding and, in particular, underbidding in first-price auctions. We investigate how the amount of underbidding depends on seemingly innocent parameters of the experimental setup. To structure our data we present and...

The average firm size of the top R&D investors among US-based companies is smaller than that of the EU-based firms. Does this help to explain why the US has a greater R&D intensity, or is the higher firm size in the EU, just as its lower R&D intensity, determined by the sectors in which the top...

The key element of models of contest is the Contest Success Function (CSF) which specifies the winning probabilities of agents. We provide an axiomatization of two parametric families of CSF’s. In the first, the winning probability of each agent depends on the investments and a vector of...