IDEAS home Printed from https://ideas.repec.org/a/spr/annopr/v328y2023i2d10.1007_s10479-023-05416-0.html
   My bibliography  Save this article

On disclosure of participation in innovation contests: a dominance result

Author

Listed:
  • Bo Chen

    (Shenzhen University)

  • Emilios Galariotis

    (Audencia Business School)

  • Lijun Ma

    (Shenzhen University)

  • Zijia Wang

    (Renmin University)

  • Zhaobo Zhu

    (Shenzhen University)

Abstract

This paper examines the effects of disclosing the actual number of participants in innovation contests with endogenous stochastic entry. We model innovation contests as a two-bidder all-pay auction with complete information, but in which each bidder has to incur a private cost to participate. The contest organizer observes solvers’ participation decisions ex post and can commit ex ante to either fully disclosing or concealing the number of participating solvers. We characterize the equilibrium behavior of the solvers and compare the performances of the disclosure policies by four criteria. We find that full concealment dominates full disclosure in terms of expected total bid and expected winner’s bid. Full concealment is dominated by full disclosure in terms of prize allocation efficiency and solvers’ welfare. These findings are in sharp contrast to those under exogenous entry.

Suggested Citation

  • Bo Chen & Emilios Galariotis & Lijun Ma & Zijia Wang & Zhaobo Zhu, 2023. "On disclosure of participation in innovation contests: a dominance result," Annals of Operations Research, Springer, vol. 328(2), pages 1615-1629, September.
    • Handle: RePEc:spr:annopr:v:328:y:2023:i:2:d:10.1007_s10479-023-05416-0
    DOI: 10.1007/s10479-023-05416-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10479-023-05416-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10479-023-05416-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Benny Moldovanu & Aner Sela, 2008. "The Optimal Allocation of Prizes in Contests," Springer Books, in: Roger D. Congleton & Arye L. Hillman & Kai A. Konrad (ed.), 40 Years of Research on Rent Seeking 1, pages 615-631, Springer.
    2. F. Bonomo & J. Catalán & G. Durán & R. Epstein & M. Guajardo & A. Jawtuschenko & J. Marenco, 2017. "An asymmetric multi-item auction with quantity discounts applied to Internet service procurement in Buenos Aires public schools," Annals of Operations Research, Springer, vol. 258(2), pages 569-585, November.
    3. Qiang Fu & Jingfeng Lu & Jun Zhang, 2016. "Disclosure policy in Tullock contests with asymmetric stochastic entry," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(1), pages 52-75, February.
    4. Laurence Ales & Soo-Haeng Cho & Ersin Körpeoğlu, 2017. "Optimal Award Scheme in Innovation Tournaments," Operations Research, INFORMS, vol. 65(3), pages 693-702, June.
    5. Milgrom, Paul & Weber, Robert J., 1982. "The value of information in a sealed-bid auction," Journal of Mathematical Economics, Elsevier, vol. 10(1), pages 105-114, June.
    6. Chen, Bo & Ma, Lijun & Zhu, Zhaobo & Zhou, Yu, 2020. "Disclosure policies in all-pay auctions with bid caps and stochastic entry," Economics Letters, Elsevier, vol. 186(C).
    7. Warneryd, Karl, 2003. "Information in conflicts," Journal of Economic Theory, Elsevier, vol. 110(1), pages 121-136, May.
    8. Ersin Körpeoğlu & Soo-Haeng Cho, 2018. "Incentives in Contests with Heterogeneous Solvers," Management Science, INFORMS, vol. 64(6), pages 2709-2715, June.
    9. Chawla, Shuchi & Hartline, Jason D. & Sivan, Balasubramanian, 2019. "Optimal crowdsourcing contests," Games and Economic Behavior, Elsevier, vol. 113(C), pages 80-96.
    10. Çağıl Koçyiğit & Halil I. Bayrak & Mustafa Ç. Pınar, 2018. "Robust auction design under multiple priors by linear and integer programming," Annals of Operations Research, Springer, vol. 260(1), pages 233-253, January.
    11. Qiang Fu & Qian Jiao & Jingfeng Lu, 2011. "On disclosure policy in contests with stochastic entry," Public Choice, Springer, vol. 148(3), pages 419-434, September.
    12. Zhen Li & Ching-Chung Kuo, 2013. "Design of discrete Dutch auctions with an uncertain number of bidders," Annals of Operations Research, Springer, vol. 211(1), pages 255-272, December.
    13. Christian Terwiesch & Yi Xu, 2008. "Innovation Contests, Open Innovation, and Multiagent Problem Solving," Management Science, INFORMS, vol. 54(9), pages 1529-1543, September.
    14. Fu, Qiang & Wu, Zenan, 2020. "On the optimal design of biased contests," Theoretical Economics, Econometric Society, vol. 15(4), November.
    15. Feng, Xin & Lu, Jingfeng, 2016. "The optimal disclosure policy in contests with stochastic entry: A Bayesian persuasion perspective," Economics Letters, Elsevier, vol. 147(C), pages 103-107.
    16. Segev, Ella, 2020. "Crowdsourcing contests," European Journal of Operational Research, Elsevier, vol. 281(2), pages 241-255.
    17. Lim, Wooyoung & Matros, Alexander, 2009. "Contests with a stochastic number of players," Games and Economic Behavior, Elsevier, vol. 67(2), pages 584-597, November.
    18. Chen, Bo & Jiang, Xiandeng & Knyazev, Dmitriy, 2017. "On disclosure policies in all-pay auctions with stochastic entry," Journal of Mathematical Economics, Elsevier, vol. 70(C), pages 66-73.
    19. Jawad Abrache & Teodor Crainic & Michel Gendreau & Monia Rekik, 2007. "Combinatorial auctions," Annals of Operations Research, Springer, vol. 153(1), pages 131-164, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chen, Bo, 2020. "Disclosure policies in research contests with stochastic entry," Economics Letters, Elsevier, vol. 191(C).
    2. Chen, Bo & Serena, Marco, 2023. "Disclosure Policies in All-Pay Auctions with Bid Caps," Journal of Economic Behavior & Organization, Elsevier, vol. 209(C), pages 141-160.
    3. Bo Chen & Marco Serena, 2020. "Bid Caps and Disclosure Policies," Working Papers tax-mpg-rps-2020-08, Max Planck Institute for Tax Law and Public Finance.
    4. Christian Ewerhart & Julia Lareida, 2018. "Voluntary disclosure in asymmetric contests," ECON - Working Papers 279, Department of Economics - University of Zurich, revised Jul 2023.
    5. Chen, Bo & Ma, Lijun & Zhu, Zhaobo & Zhou, Yu, 2020. "Disclosure policies in all-pay auctions with bid caps and stochastic entry," Economics Letters, Elsevier, vol. 186(C).
    6. Bo Chen & Emilios Galariotis & Lijun Ma & Zijia Wang & Zhaobo Zhu, 2023. "On disclosure of participation in innovation contests: a dominance result," Post-Print hal-04185528, HAL.
    7. Hou, Ting & Zhang, Wen, 2021. "Optimal two-stage elimination contests for crowdsourcing," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).
    8. Goutham Takasi & Milind Dawande & Ganesh Janakiraman, 2023. "Optimal cardinal contests," Production and Operations Management, Production and Operations Management Society, vol. 32(11), pages 3433-3451, November.
    9. Xiaotie Deng & Yotam Gafni & Ron Lavi & Tao Lin & Hongyi Ling, 2021. "From Monopoly to Competition: Optimal Contests Prevail," Papers 2107.13363, arXiv.org.
    10. Chen, Zhuoqiong, 2021. "Optimal information exchange in contests," Journal of Mathematical Economics, Elsevier, vol. 96(C).
    11. Jiao, Qian & Ke, Changxia & Liu, Yang, 2022. "When to disclose the number of contestants: Theory and experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 193(C), pages 146-160.
    12. Liu, Bin & Lu, Jingfeng, 2019. "The optimal allocation of prizes in contests with costly entry," International Journal of Industrial Organization, Elsevier, vol. 66(C), pages 137-161.
    13. Jürgen Mihm & Jochen Schlapp, 2019. "Sourcing Innovation: On Feedback in Contests," Management Science, INFORMS, vol. 65(2), pages 559-576, February.
    14. 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.
    15. Drugov, Mikhail & Ryvkin, Dmitry, 2017. "Winner-Take-All Tournaments," CEPR Discussion Papers 12067, C.E.P.R. Discussion Papers.
    16. Christian Ewerhart & Federico Quartieri, 2020. "Unique equilibrium in contests with incomplete information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 70(1), pages 243-271, July.
    17. Nirup Menon & Anant Mishra & Shun Ye, 2020. "Beyond Related Experience: Upstream vs. Downstream Experience in Innovation Contest Platforms with Interdependent Problem Domains," Manufacturing & Service Operations Management, INFORMS, vol. 22(5), pages 1045-1065, September.
    18. Xu Tian & Gongbing Bi, 2021. "Award scheme in random trial contests," Annals of Operations Research, Springer, vol. 302(1), pages 313-325, July.
    19. Konstantinos I. Stouras & Jeremy Hutchison-Krupat & Raul O. Chao, 2022. "The Role of Participation in Innovation Contests," Management Science, INFORMS, vol. 68(6), pages 4135-4150, June.
    20. C. Gizem Korpeoglu & Ersin Körpeoğlu & Sıdıka Tunç, 2021. "Optimal Duration of Innovation Contests," Manufacturing & Service Operations Management, INFORMS, vol. 23(3), pages 657-675, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:annopr:v:328:y:2023:i:2:d:10.1007_s10479-023-05416-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.