Contests & Conflict | 10/06/2021 | 12:00 PM
Scarcity of Ideas and Optimal Prizes in Innovation Contests

Speaker: Jun Xiao

Date & Time: Sydney (9 pm), Los Angeles (3 am), Cincinnati (6 am), Bath (11 am), Munich (12 pm), Singapore (6 pm), Beijing (6 pm)

Jun Xiao will present his paper titled "Scarcity of Ideas and Optimal Prizes in Innovation Contests" (joint work with Nisvan Erkal).

Abstract of the paper:
This paper studies the relationship between optimal prizes and scarcity of ideas in innovation contests. We consider a model where both ideas and effort are integral parts of the innovation process. Contest participants are privately informed about their idea quality. We introduce a new stochastic order to rank scarcity of ideas and study how a contest designer's choice--the profit maximizing prize--should vary with scarcity of ideas. We find that scarcity of ideas results in higher optimal prizes if and only if the benefit from a marginal improvement in the new technology's performance is sufficiently low.

Chair: Lionel Page, Co-Chair: Qiang Fu and Tracy Liu

Contact Person

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