Contests & Conflict | 08/17/2022 | 04:00 PM
Creative Contests - Theory and Experiment

Speaker: Feng Zhu

Date & Time: Los Angeles (7 am), Cincinnati (10 am), Bath (3 pm), Munich (4 pm), Beijing (10 pm), Singapore (10 pm), Sydney (August 18, 12 am)

Feng Zhu will present the paper titled "Creative Contests - Theory and Experiment".

Abstract of the Paper:
In many competitions where creativity and innovation play a large role (e.g., architecture design competitions or research grant competitions), contestants can be uncertain about the organizer’s exact preferences. I develop a model of creative contests in which two firms compete by adjusting their designs when they are uncertain about the contest organizer’s ideal design. My model contrasts with existing contest models, as the latter assume organizer preferences instead to be public knowledge. A model of creative contests that accounts for such uncertainty enables us to study many new questions. In particular, I investigate whether an organizer should disclose her ideal design to contestants and find that disclosure is not always optimal for organizers, because disclosing an ideal design favors one participant over others and thus discourages competition. I also conduct a laboratory experiment to test the model’s empirical relevance when assumptions about rationality and risk-neutrality are not necessarily satisfied and find that the results are generally consistent with theoretical predictions for contestants’ behavior and for whether the organizer benefits from disclosure.

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

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