Markets for ideas: prize structure, entry limits, and the design of ideation contests
Corresponding Author
Pavel Kireyev
INSEAD Europe Campus, France
Search for more papers by this authorCorresponding Author
Pavel Kireyev
INSEAD Europe Campus, France
Search for more papers by this authorI thank my committee, Elie Ofek, Sunil Gupta, and Ariel Pakes for their support. I thank Karim Lakhani, Robin Lee, Donald Ngwe, Daniel Pollmann, Al Silk, Thomas Wollmann, and participants at numerous seminars for helpful discussions. I thank the editor and two anonymous referees for their helpful comments. I thank the data provider for providing insight into the data and sharing useful information about innovation platforms. All errors are my own.
Abstract
I develop an empirical model of idea generation contests with heterogeneous participants and endogenous entry, fit the model to data from a platform used by major advertisers, and simulate counterfactual contest designs. The empirical model resolves ambiguous predictions yielded by contest theory about the effects of different prize structures on contest outcomes. Simulations reveal the impact of strategies that hold fixed total award and balance competition by handicapping advantaged participants. Increasing the number of prizes while restricting the number of prizes per participant can improve outcomes for the platform. The results provide guidance for the design of large contests.
Supporting Information
| Filename | Description |
|---|---|
| rand12325-sup-0001-SuppMat.pdf2.9 MB |
Figure 1: The Idea Submission Process Figure 2: Dispersion in Idea Characteristics Within and Across Participants Figure 3: Distribution of Idea Submission Times Figure 4: Scatter of Submission Outcomes and Total Award Figure 5: Distribution of Contest Duration Figure 6: Participant-Level Regression Estimates by Participation Frequency Figure 7: Difference in Outcomes Between 2-Prize and 1-Prize Scenarios Figure 8: Difference in Outcomes Between 2 Submission and 1 Submission Limit Scenarios Table 1: Participant-Level Logistic Regressions of Entry and Victory on Participant Characteristics Table 2: Participant-Level Regressions of Average Rating on Submissions and Participant Charac- teristics Table 3: Jury Rating Model Parameter Estimates for Selected Sample Table 4: Ideation Cost Estimates for Selected Sampel Table 5: Ideation Cost Estimates Ignoring Non-Entrants Table 6: Average Counterfactual Design Outcomes Across Contests Ignoring Non-Entrants
Table 7: Contest-Level Regressions of Outcomes on log(Total_Award Table 8: Contest-Level Regressions of Submissions on Contest Duration Table 9: Contest-Level Regressions of Outcomes on log(Number of Prizest) Table 10: Sponsor Choice Model Parameter Estimates Table 11: Average Impact of 4 Submissions Limit on a Subset of Contests
Table 12: Participant-Level Regressions of Rating on log(Total_Award |
)
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