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Innovation Tournaments with Multiple Contributors

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  • Laurence Ales
  • Soo‐Haeng Cho
  • Ersin Körpeoğlu

Abstract

This study examines innovation tournaments in which an organizer seeks solutions to an innovation‐related problem from a number of agents. Agents exert effort to improve their solutions but face uncertainty about their solution performance. The organizer is interested in obtaining multiple solutions—agents whose solutions contribute to the organizer’s utility are called contributors. Motivated by mixed policies observed in practice, where some tournaments are open and others restrict entry, we study when it is optimal for the organizer to conduct an open tournament or to restrict entry. Our analysis shows that whether an open tournament is optimal is tied to: (1) the variance of uncertainty as compared to the impact of effort; (2) the number of contributors, and (3) the skewness of the uncertainty distribution. Our results help explain mixed policies about restricting entry observed in practice as well as recent empirical and experimental findings.

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  • Laurence Ales & Soo‐Haeng Cho & Ersin Körpeoğlu, 2021. "Innovation Tournaments with Multiple Contributors," Production and Operations Management, Production and Operations Management Society, vol. 30(6), pages 1772-1784, June.
    • Handle: RePEc:bla:popmgt:v:30:y:2021:i:6:p:1772-1784
    DOI: 10.1111/poms.13342
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    2. Ha Ta & Terry L. Esper & Travis Tokar, 2021. "Appealing to the Crowd: Motivation Message Framing and Crowdsourcing Performance in Retail Operations," Production and Operations Management, Production and Operations Management Society, vol. 30(9), pages 3192-3212, September.
    3. Ryvkin, Dmitry & Drugov, Mikhail, 2020. "The shape of luck and competition in winner-take-all tournaments," Theoretical Economics, Econometric Society, vol. 15(4), November.
    4. Vipul Aggarwal & Elina H. Hwang & Yong Tan, 2021. "Learning to Be Creative: A Mutually Exciting Spatiotemporal Point Process Model for Idea Generation in Open Innovation," Information Systems Research, INFORMS, vol. 32(4), pages 1214-1235, December.
    5. Joel O. Wooten, 2022. "Leaps in innovation and the Bannister effect in contests," Production and Operations Management, Production and Operations Management Society, vol. 31(6), pages 2646-2663, June.
    6. Lakshminarayana Nittala & Sanjiv Erat & Vish Krishnan, 2022. "Designing internal innovation contests," Production and Operations Management, Production and Operations Management Society, vol. 31(5), pages 1963-1976, May.

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