Procuring 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 trade-off via two instruments: a cash prize and a follow-on contract. It primarily uses the latter, by favoring the innovator at the implementation stage when the value of the innovation is above a certain threshold and handicapping the innovator when the value of the innovation is below that threshold. A cash prize is employed as a supplementary incentive only when the value of innovation is sufficiently high. These features are consistent with current practices in the procurement of innovation and the management of unsolicited proposals.
Iossa, E., Rey, P., & Che, Y. (2021). Prizes vs Contracts as Incentives for Innovation. THE REVIEW OF ECONOMIC STUDIES.
|Tipologia:||Articolo su rivista|
|Citazione:||Iossa, E., Rey, P., & Che, Y. (2021). Prizes vs Contracts as Incentives for Innovation. THE REVIEW OF ECONOMIC STUDIES.|
|Altre informazioni significative:||We gratefully acknowledge financial support from the European Research Council (ERC) under the European Community's Seventh Framework Programme (FP7/2007-2013) Grant Agreement N 340903, the Agence Nationale de la Recherche under the "Investing for the Future program" (grant ANR-17-EURE-0010), and the Italian Ministry of Education, PRIN 2017, Grant n. 2017Y 5PJ43 001|
|IF:||Con Impact Factor ISI|
|Settore Scientifico Disciplinare:||Settore SECS-P/01|
|Revisione (peer review):||Esperti anonimi|
|Stato di pubblicazione:||In corso di stampa|
|Data di pubblicazione:||2021|
|Titolo:||Prizes vs Contracts as Incentives for Innovation|
|Autori:||Iossa, E; Rey, P; Che, Y|
|Appare nelle tipologie:||01 - Articolo su rivista|