Contests & Conflict | 04/21/2021 | 02:00 AM
Strategic Experimentation and Information Design in Dynamic Contests

Speaker: Mohamed Mostagir

Mohamed Mostagir will present his paper titled "Strategic Experimentation and Information Design in Dynamic Contests" (joint work with Yan Chen and Iman Yeckehzaare).

Abstract of the paper:
"Many real-world innovation contests and R&D races have an end goal that might be infeasible. Participants learn about feasibility from their own experimentation and also from observing the progress (or lack thereof) of their competitors. If participants incorrectly learn that the goal is infeasible, they quit the contest and abandon an innovation that could have been achieved. In this paper, we design a novel real-effort experiment to show that a contest designer can avert this undesirable outcome through her choice of information mechanism. By allowing participants to monitor each other's progress, either fully or partially, she significantly increases the chances that the innovation is obtained when it is indeed feasible and when the common prior belief about infeasibility is high. We show that competitor behavior and contest outcomes are sensitive to the timing at which information is released, and we discuss how different information mechanisms affect the designer's payoffs and participants' earnings. Our results provide the first experimental test of the role of information in environments that combine strategic experimentation and dynamic competition, and offer concrete guidelines for how practitioners and applied researchers should select a contest's information mechanism in order to maximize the chances of innovation."

Chair: Tracy Liu, Co-Chair: Qiang Fu

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