Innovation through competitive experimentation

Peter Achim

doi:10.1016/j.jmateco.2024.102957

Innovation through competitive experimentation

Peter Achim

Economics

Research output: Contribution to journal › Article › peer-review

Abstract

This paper studies optimal contest design for competitive experimentation. A principal wants to implement a project and seeks contributions from multiple agents that increase the value of the project. The agent's chances of success are independent and their experimentation efforts are unobservable. To induce effort, the principal offers a mechanism that specifies rewards and a termination time which depend on the history of past contributions. I characterize the optimal contest and show that the principal limits the agents' rent by setting inefficiently tight stopping thresholds.

Original language	English
Article number	102957
Number of pages	15
Journal	Journal of Mathematical Economics
Volume	111
Early online date	7 Feb 2024
DOIs	https://doi.org/10.1016/j.jmateco.2024.102957
Publication status	Published - Apr 2024

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10.1016/j.jmateco.2024.102957Licence: CC BY

Cite this

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