Innovation Contests With Risk-Averse Participants

42 Pages Posted: 5 May 2021 Last revised: 30 Sep 2021

See all articles by Xu Tian

Xu Tian

University of Science and Technology of China (USTC) - School of Management

Date Written: May 1, 2021

Abstract

The innovation contest is well organized to provide solutions or ideas for companies. In the existing innovation contest literature, several papers assume that the contestants are risk neutral and show that a single-winner award scheme is optimal. In this paper, we assume that the contestants are risk averse and show that the risk aversion of contestants can explain the popularity of the multiple-winner, convex (unequal) allocation scheme, which generalizes the findings of a prior study and coincides with practical observations. This result also possesses a certain robustness in several cases.

Keywords: innovation contest, risk-averse contestants, multiple-winner, award allocation

Suggested Citation

Tian, Xu, Innovation Contests With Risk-Averse Participants (May 1, 2021). Available at SSRN: https://ssrn.com/abstract=3837747 or http://dx.doi.org/10.2139/ssrn.3837747

Xu Tian (Contact Author)

University of Science and Technology of China (USTC) - School of Management ( email )

China

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