&D investment, and derive predictions on the effects of trust and competition on suppliers' investment and buyers' procurement … - but also with more competitive procurement: trust and rents from reduced supplier competition in the procurement process … emerge as substitutes both in theory and in the data. …

. This ignores a potential adverse selection problem. The present paper analyzes the procurement of innovations when the …

We consider procurement of an innovation from heterogeneous sellers. Innovations are random but depend on unobservable … effort and private information. We compare two procurement mechanisms where potential sellers first bid in an auction for …