Dynamic Development Contests

Ersin Körpeoğlu, UCL School of Management

Abstract

Public, private, and not-for-profit organizations find advanced technology and product development projects challenging to manage due to the time and budget pressures, and turn to their development partners and suppliers to address their development needs. We study how dynamic development contests with enriched rank-based incentives and carefully-tailored information design can help these organizations leverage their suppliers for their development projects while seeking to minimize project lead time by stimulating competition among them. We find that an organization using dynamically-adjusted flexible rewards can achieve the minimum expected project lead time at a significantly lower cost than a fixed-reward policy. Importantly, the derived flexible-reward policy pays the minimum expected reward (i.e., achieves the first best). We further examine the case where the organization may not have sufficient budget to offer a reward that attains the minimum expected lead time. In this case, the organization uses the whole reward budget and supplements it with strategic information disclosure. Specifically, we derive an optimal information disclosure policy whereby any change in the state of competition is disclosed immediately with some probability that increases over time. Our results indicate that dynamic rewards and strategic information disclosure are powerful tools to help organizations fulfill their development needs swiftly and cost effectively.

Dr Ersin Körpeoglu is an Associate Professor at UCL School of Management. He received his PhD in Operations Management from Tepper School of Business at Carnegie Mellon University in 2015. Dr Körpeoglu’s research focuses on theoretical, empirical, and experimental analysis of operational problems in application areas including innovative business models such as crowdsourcing, crowdfunding, and telemedicine, product development, socially-responsible operations, and supply chain management. Dr Körpeoglu’s work has been published in world leading academic journals such as Management Science, Operations Research, and Manufacturing & Service Operations Management and practitioner journals such as INTERFACES. His work is also featured in media outlets such as the Financial Times and the Wall Street Journal. He is the recipient of the first prize in the INFORMS Technology, Innovation Management and Entrepreneurship Section (TIMES) Doctoral Dissertation Award Competition in 2016, the second prize in TIMES Best Working Paper Award Competitions in 2018 and 2021, and the second prize in TIMES Best Paper Award Competition in 2022.

Venue

Friday, March 24, 2023, 4.00 pm - Zoom