Template-Type: ReDIF-Paper 1.0
Title: Incentives for Collective Innovation
Author-Name: Gregorio Curello
Author-Email: gcurello@uni-bonn.de

Classification-JEL: C73, D82
Keywords: dynamic games, imperfect monitoring, public goods, private information

Abstract: Agents exert hidden effort to produce randomly-sized innovations in a
technology they share. Returns from using the technology grow as it develops,
but so does the opportunity cost of effort, due to an ‘exploration-exploitation’
trade-off. As monitoring is imperfect, there exists a unique
(strongly) symmetric equilibrium, and effort in any equilibrium ceases no
later than in the single-agent problem. Small innovations may hurt all
agents in the symmetric equilibrium, as they severely reduce effort. Allowing
agents to discard innovations increases effort and payoffs, preserving
uniqueness. Under natural conditions, payoffs rise above those of all equilibria
with forced disclosure.

Note: 
Length: 41
Creation-Date: 2024-06
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp566
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2024_566