This paper analyzes the design of innovation contests when the quality of an innovation depends on the research approach of the supplier, but the best approach is unknown. Diversity of approaches is desirable because it generates an option value. In our main model with two suppliers, the buyer...

This note studies contests in which multiple participants compete for two distinct prizes. The participants have distinct constant marginal costs, which are commonly known. We show that the contests have a unique Nash equilibrium, and we characterize the equilibrium payoffs and strategies in...

In this paper we deal with situations of collective contests between two groups over a private prize. A well known way to divide the prize within the winning group is the prize sharing rule introduced by Nitzan, 1991. Since its introduction it has become a standard in the collective contests...

We consider multi-stage elimination contests, where agents efforts at different stages generate some output for the organizers. Depending on the output function we characterize the optimal prize structure of the tournament and show that it is almost efficient. We have found that in some cases...

We propose a novel tournament design that incorporates the main properties of a round-robin tournament, a Swiss tournament, and a race. Following an equilibrium analysis, we compare 36 tournament structures inherent in our model and several well-known tournament models from the literature, on...