CMD affiliate Jun Xiao presents at Econometric Society World Congress

CMD affiliate Jun Xiao presented a paper entitled Awarding scarce ideas in innovation contests, at The Econometric Society World Congress on August 21, 2015.

Written by Nisvan Erkal and Jun Xiao (University of Melbourne), the paper studies the relationship between optimal awards and scarcity of ideas in innovation contests. It considers contests with different distributions of idea qualities and conduct comparative static analysis of optimal – revenue maximizing – awards with respect to the distributions. It finds that a distribution with scarcer ideas leads to higher optimal awards if the marginal value of innovation quality is low enough, and it leads to lower optimal awards if the marginal value is high enough.