Interplay between Constraints and Rewards in Innovation Tournaments: Implications for Participation

Abstract

In this study, we examine how the monetary rewards and competitive constraints that organizers of innovation tournaments incorporate are associated with participation. These two aspects of innovation tournaments are crucial because they represent critical design decisions that the organizers must make beforehand. We show that the reward amount is negatively associated with participation, while the presence of competitive constraints, which “make the competitive landscape less asymmetric”, is positively associated with participation. Furthermore, the study shows that competitive constraints moderate the negative association between reward amount and participation. These findings provide insights into contestant motivation as well as the interdependencies between tournament design choices.