| Description |
This dissertation explores innovation-related topics including designing dynamic innovation contests with the emphasis on dynamic information design, and new product/process development with the focus on innovation type and market competitiveness using analytical models. In the first essay, I study and characterize the optimal effort-maximizing design of twostage innovation contests where a principal controls the prize and information disclosure policy. I introduce a simple award structure, which is easy to implement in practice, with the use of adaptive prizes and a novel information disclosure policy whereby information is revealed only probabilistically over time, and only when strictly needed. Because information is a strategic commodity, the optimal disclosure policy must ensure that none of it is ever wasted. Probabilistic revelation achieves this goal by providing information only privately, and only in states where information promotes incentives. These results uncover a new powerful and free incentive device for the designer. The second essay addresses the question of whether, and how, fast product life cycles contribute to firm profitability along with economic growth. The results illustrate that the perceived clockspeed measure, that is, rapidity of product development cycles, is not necessarily an appropriate point of reference for managers and policymakers. Thus to supplement this measure, the study proposes two additional clockspeed measures, that is, absolute clockspeed and relative clockspeed, that capture economic growth rate, and firm profit respectively - the research provides insights into how firms can increase the absolute and relative clockspeeds, and the results can thus help guide business leaders and researchers in understanding how these three clockspeed measures are intertwined. Additionally, the model leads to a portfolio of strategies that managers might pursue to increase the absolute and relative clockspeeds. |
