The Optimal Design of Research Contests

新产品的采购，如武器系统、运输系统或新车型，往往需要供应商做出实质性的创新努力。然而，通过双边合同采购这种努力可能很困难，因为这种努力可能是“无法核实的”和“合作的”。“也就是说，努力的程度无法由第三方验证，所产生的价值的很大一部分可能会归买方所有。此外，破产问题和法律的限制的能力，采购收取入场费（即，“有限责任”）。在这样的环境中，创业者往往依靠竞赛来获得创新成果。特别是，研究竞赛已成为一个重要组成部分的R D采购比赛主办的各种政府机构（特别是国防部）以及私人firm.The拟议的研究将研究采购的最佳方法时，不可验证性，合作和有限责任是重要的。我们将首先说明用竞赛代替双边合同的理由。其次，我们将研究采购商应该如何选择一组公司参加比赛。最后，也是最重要的，我们将描述最优竞赛设计。在这样做的时候，我们考虑了大量的奖品结构，其中包括拍卖（参赛者出价他们的奖品）和比赛（奖品是固定的）作为特例。例如，拍卖文献已经对拍卖的事后绩效产生了实质性的见解（即，商品或合同如何分配，以及剩余如何分配），表明拍卖可能是一种最优机制。然而，对最佳机制的探索尚未扩大到包括事前投资激励措施。 最近的研究竞赛和进入拍卖的工作已经纳入了一个事前的层面，但它仍然采取给定的形式的比赛（拍卖或锦标赛）。建议的研究将是第一个考虑广泛的比赛，内生的奖品结构，并确定最佳的比赛时，事前和事后的性能考虑是重要的。在第一部分中，我们将提供均衡投资和投标策略的封闭式表达式，即使是不对称公司（即，不同投资技术的公司）。第二部分将确定最优的竞赛设计，使用一种新的对偶参数。(The标准机制设计方法在此不起作用。）当两个厂商是对称的时，只有两个厂商且没有保留价的第一价格拍卖是最优的。如果公司有不同的技术，拍卖与两个公司似乎是最佳的，但与更有效的公司被dispersion.This研究将作出显着的贡献，一般的比赛，特别是拍卖的文献。它还将通过调查竞赛在激励合作投资中的特殊作用，对不完全契约文献作出贡献。最后，它将被证明是有用的竞赛设计师。考虑到拍卖管理的简单性，只有两家公司的第一价格拍卖的最优性尤为重要。

The procurement of new products such as weapons systems, transportation systems, or new car models often requires substantial innovative effort by suppliers. Procuring such efforts through bilateral contracts may be difficult, however, since the efforts may be "unverifiable" and "cooperative." That is, the level of effort cannot be verified by a third party, and a substantial fraction of the value generated may accrue to the buyer. Also, bankruptcy concerns and legal restrictions limit the ability of the procurer to charge entry fees (i.e., "limited liability" ). Procurers have often relied on contests to procure innovative effort in such an environment. In particular, research contests have been an important part of R&D procurement competitions sponsored by various government agencies (notably the Department of Defense) as well as private firms.The proposed research will study the optimal method of procurement when unverifiability,cooperativeness and limited liability are important. We will first make the case for using contests in place of bilateral contracts. Second, we will study how the procurer should select the set of firms to participate in the contest. Finally, and most importantly, we will characterize the optimal contest design. In doing so, we allow for a vast array of prize structures, which includes auctions (contestants bid their prizes) and tournaments (the prize is fixed) as special cases.Some aspects of these issues have been studied previously. For instance, the auctions literature has yielded substantial insights into the en post performance of auctions (i.e., how the good or Contract is allocated, and how the surplus is divided), showing that auctions may be an optimal mechanism. The search for an optimal mechanism has not been extended to incorporate en ante investment incentives, however. Recent work on research contests and entry into auctions has incorporated an ex ante dimension, but it still takes as given the form of contest (auction or tournament). The proposed research will be the first to consider a broad class of contests, to endogenize the prize structure, and to identify the optimal contest when ex ante and ex post performance considerations are important.The completed research will be presented in two parts. In the first part, we will provide closed-form expressions for equilibrium investment and bidding strategies, even with asymmetric firms (i.e., firms with different investment technologies). The second part will identify the optimal contest design, using a novel duality argument. (The standard mechanism design approach does not work here.) A first-price auction with just two firms and no reserve price is optimal if the firms are symmetric. If the firms have different technologies, an auction with two firms appears to be optimal, but with the more efficient firm being handicapped.This research will make a signficant contribution to the literature on contests in general, and auctions in particular. It will also contribute to the incomplete contracts literature by investigating the special role of contests in motivating cooperative investments. Finally, it will prove useful to contest designers. The optimality of first-price auctions with just two firms is particularly important, given the ease of administering auctions.