Top idea: designing innovation contests
Innovation contests and prizes are popular tools for uncovering the best ideas but are we really getting the cream of the crop?
Optimal Design of Innovation Contests
Innovation contests and prizes are increasingly popular tools for business and governments to unearth groundbreaking ideas.
But how should they be designed, and what sort of prizes should be on offer, to ensure that they attract the best ideas?
Using an Australian Research Council Discovery grant, Economics Professor Nisvan Erkal and Dr Jun Xiao will work to discover the optimal design and prize structure for innovation contests.
Innovation contests include entrepreneurs and firms competing against one another to develop a new technology or product, with many run through online platforms that offer prizes for the best idea or solution.
The study will also use experiments involving human subjects to test the predictions of existing and alternative innovation contest models, working from the assumption that to solve a problem, a solver must …first have an idea and then the incentive to invest in that idea, and that the idea quality is likely to have an impact on the solver’'s participation and effort decisions.
As the mining boom recedes, the role of innovation in improving economic performance is becoming increasingly vital.
This research is aiming to discover the optimal design for innovation contests and help foster national growth and productivity by improving the incentives given for innovation.