• Media type: E-Book
  • Title: Prizes Versus Contracts as Incentives for Innovation
  • Contributor: Che, Yeon-Koo [Author]; Iossa, Elisabetta [Other]; Rey, Patrick [Other]
  • Published: [S.l.]: SSRN, [2015]
  • Published in: CEIS Working Paper ; No. 358
  • Extent: 1 Online-Ressource (55 p)
  • Language: English
  • DOI: 10.2139/ssrn.2677626
  • Identifier:
  • Origination:
  • Footnote: Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments September 25, 2015 erstellt
  • Description: The procurement of an innovation involves motivating a research effort to generate a new idea and then implementing that idea efficiently. If research efforts are unverifiable and implementation costs are private information, a trade-off arises between the two objectives. The optimal mechanism resolves the tradeoff via two instruments: a monetary prize and a contract to implement the project. The optimal mechanism favors the innovator in contract allocation when the value of innovation is above a certain threshold, and handicaps the innovator in contract allocation when the value of innovation is below that threshold. A monetary prize is employed as an additional incentive but only when the value of innovation is sufficiently high
  • Access State: Open Access