Prizes and Lemons: Procurement of Innovation under Imperfect Commitment

The literature on R&D contests implicitly assumes that contestants submit their innovation regardless of its value. This ignores a potential adverse selection problem. The present paper analyzes the procurement of innovations when the procurer cannot commit to never bargain with innovators who bypass the contest. We compare ?xed-prize tournaments with and without entry fees, and optimal scoring auctions with and without minimum score requirement. Our main result is that the optimal ?xed-prize tournament is more pro?table than the optimal auction since preventing bypass is more costly in the optimal auction

An extensive English language bibliography on graph theory and its applications

Bibliography on graph theory and its application

Prizes and Lemons: Procurement of Innovation under Imperfect Commitment

The literature on R&D contests implicitly assumes that contestants submit their innovation regardless of its value. This ignores a potential adverse selection problem. The present paper analyzes the procurement of innovations when the procurer cannot commit to never bargain with innovators who bypass the contest. We compare ?xed-prize tournaments with and without entry fees, and optimal scoring auctions with and without minimum score requirement. Our main result is that the optimal ?xed-prize tournament is more pro?table than the optimal auction since preventing bypass is more costly in the optimal auction.innovation; contests; tournaments; auctions; bargaining; adverse

Determining a Slater Winner Is Complete for Parallel Access to NP

We consider the complexity of deciding the winner of an election under the Slater rule. In this setting we are given a tournament T = (V,A), where the vertices of V represent candidates and the direction of each arc indicates which of the two endpoints is preferable for the majority of voters. The Slater score of a vertex v ? V is defined as the minimum number of arcs that need to be reversed so that T becomes acyclic and v becomes the winner. We say that v is a Slater winner in T if v has minimum Slater score in T. Deciding if a vertex is a Slater winner in a tournament has long been known to be NP-hard. However, the best known complexity upper bound for this problem is the class ??^p, which corresponds to polynomial-time Turing machines with parallel access to an NP oracle. In this paper we close this gap by showing that the problem is ??^p-complete, and that this hardness applies to instances constructible by aggregating the preferences of 7 voters