Entrepreneurship in biotechnology: managing for growth from start-up to initial public offering ; with 24 tables
In: Contributions to management science
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In: Contributions to management science
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In: European Journal of Political Economy, Band 33, S. 134-148
In: European journal of political economy, Band 33, S. 134-148
ISSN: 1873-5703
In this article, contestants play with a certain probability in Contest A and with the complementary probability in Contest B. This situation is called contest uncertainty. In both contests, effort is additively distorted by a contest noise parameter which affects the sensitivity of the contest success function (CSF). In Contest A (B), this parameter is linearly added to (subtracted from) effort. We analyze the interaction of contest uncertainty and contest noise on contestant behavior and profit. For symmetric contestants, contest noise has an ambiguous effect on effort and profit. We show that more contest uncertainty can imply greater effort. Furthermore, an introduction of an infinitesimal degree of contest uncertainty can have a large impact on effort and profit. Based on the analysis, this article presents the contest organizer's incentive to manipulate the degree of uncertainty in the contest. For profit or effort maximization, the contest organizer should always eliminate any uncertainty. If contestants are asymmetric, more contest noise increases effort as well as competitive balance if both Contests A and B have the same probability of occurrence. [Copyright Elsevier B.V.]
In: European Journal of Political Economy, Band 37, S. 280-287
In: Public choice, Band 150, Heft 3-4, S. 691-713
ISSN: 1573-7101
We consider two bidders with asymmetric valuations competing to win an exogenous prize. Capital markets are imperfect, such that the contestants possibly face a liquidity constraint. We show that aggregate investments are lower if at least one bidder has a liquidity constraint, even if the low-valuation bidder possibly increases his/her investments. Furthermore, the effect of the high-valuation bidder's liquidity constraint on competitive balance is ambiguous. However, if the low-valuation bidder is constrained, greater wealth unambiguously increases competitive balance. Surprisingly, if the low-valuation bidder has a constraint, a tighter constraint can increase his/her profit. Adapted from the source document.
In: Journal of institutional and theoretical economics: JITE, Band 167, Heft 4, S. 557
ISSN: 1614-0559
In: Public choice, Band 150, Heft 3, S. 691-714
ISSN: 0048-5829
In: Public choice, Band 150, Heft 3-4, S. 691-713
ISSN: 1573-7101
In: Journal of institutional and theoretical economics: JITE, Band 165, Heft 3, S. 401
ISSN: 1614-0559
SSRN
Working paper
SSRN
Working paper
In: Journal of institutional and theoretical economics: JITE, Band 172, Heft 4, S. 645
ISSN: 1614-0559
In: The B.E. journal of theoretical economics, Band 11, Heft 1
ISSN: 1935-1704
This paper constructs and analyzes open-loop equilibria in an infinitely repeated Tullock contest in which two contestants contribute efforts to accumulate individual asset stocks over time. To investigate the transitional dynamics of the contest in the case of a general cost function, we linearize the model around the steady state. Our analysis shows that optimal asset stocks and their speed of convergence to the steady state crucially depend on the elasticity of marginal effort costs, the discount factor and the depreciation rate. In the case of a cost function with a constant elasticity of marginal costs, a lower discount factor, a higher depreciation rate and a lower elasticity imply a higher speed of convergence to the steady state. We further analyze the effects of second prizes in the contest. A higher prize spread increases individual and aggregate asset stocks, but does not alter the balance of the contest in the long run. During the transition, a higher prize spread increases asset stocks, produces a more balanced contest in each period and increases the speed of convergence to the steady state.