Incentivizing variety in innovation contests with specialized suppliers

• 成果类型: Article
• 署名作者: Protopappas, Konstantinos; Rietzke, David
• 署名单位: University of Innsbruck; Lancaster University
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2025.08.003
• 发表日期: 2025
• 页码: 586-621
• 关键词: innovation contests; Product diversity; procurement; moral hazard

摘要

We study the optimal design of an innovation contest where a buyer seeks product variety and faces a moral hazard problem. The suppliers are specialized and may differ in their flexibility to adopt approaches outside their areas of expertise. If the specializations are sufficiently different and suppliers are otherwise symmetric, the buyer attains the first-best with a fixed-prize contest (FPC). If one supplier is inherently advantaged or the specializations are sufficiently close, the first-best is unattainable with an FPC. In all cases, an auction is an optimal contest and implements the first-best, provided the buyer can discriminate within the contest; if not, the buyer may prefer an FPC.