Incentives for collective innovation by Gregorio Curello

Join us for another event in the Microeconomics Research Seminar Series, Autumn Term 2022.

Gregorio Curello from the Institute for Microeconomics, University of Bonn will present their research on Incentives for collective innovation.

Abstract

Identical agents exert hidden effort to produce randomly-sized improvements in a technology they share. Their payoff flow grows as the technology develops, but so does the opportunity cost of effort, due to a resource trade-off between using and improving the technology. The game admits a unique strongly symmetric equilibrium, and it is Markov; that is, no form of punishment is sustainable. Moreover, in this equilibrium, small innovations may hurt all agents as they severely reduce effort. Allowing each agent to discard the innovations she produces (after observing their size) increases equilibrium effort and welfare. If agents can instead conceal innovations for a period of time, there exists an equilibrium in which improvements are refined in secret until they are sufficiently large, and progress stops after disclosure. Although concealment is inefficient due to forgone benefits and the risk of redundancy, under natural conditions, this equilibrium induces higher welfare than all equilibria with forced disclosure.

This seminar will be held in the Economics Common Room on Monday 28 November 2022 at 4pm. This event is open to all levels of study and is also open to the public.

To register your place and gain access to the webinar, please contact the seminar organisers.

This event is part of the Microeconomics Research Seminar Series.