Performance feedback in competitive product development

• 成果类型: Article
• 署名作者: Gross, Daniel P.
• 署名单位: Harvard University; National Bureau of Economic Research
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12182
• 发表日期: 2017
• 页码: 438-466
• 关键词: rank-order tournaments; innovation contests; uncertainty; disclosure; auctions; DESIGN

摘要

Performance feedback is ubiquitous in competitive settings where new products are developed. This article introduces a fundamental tension between incentives and improvement in the provision of feedback. Using a sample of 4294 commercial logo design tournaments, I show that feedback reduces participation but improves the quality of subsequent submissions, with an ambiguous effect on high-quality output. To evaluate this trade-off, I develop a procedure to estimate agents' effort costs and simulate counterfactuals under alternative feedback policies. The results suggest that feedback on net increases the number of high-quality ideas produced and is thus desirable for a principal seeking innovation.