The literature on R&D contests implicitly assumes that contestants submit their innovation regardless of its value …. 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 … admission to an innovation contest. After the contest, an innovation is procured employing either a fixed prize or a first …

The role of innovation in improving productivity might vary according to a country's relative position in technology … advancement. Frontier countries might benefit more from policies that promote firms' internal innovation (create), while follower … countries would gain more from policies favoring the adoption of existing technologies through innovation outsourcing (buy …