Issue |
E3S Web Conf.
Volume 295, 2021
International Scientific Forum on Sustainable Development and Innovation (WFSDI 2021)
|
|
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Article Number | 01058 | |
Number of page(s) | 6 | |
Section | Sustainable Development of Regions: Economic Aspect | |
DOI | https://doi.org/10.1051/e3sconf/202129501058 | |
Published online | 26 July 2021 |
Efficient multi-period distribution mechanism for the innovation investment system under uncertainty
Kabardino-Balkarian Scientific Center of the Russian Academy of Sciences, Institute for Computer Science and Problems of Regional Management, 360004 Nalchik, Russia.
* Corresponding author: alemao@mail.ru
In this paper, we study the problem of a venture investor who distributes the budget between several innovation projects under conditions of uncertainty. A common method for solving this problem is through bilateral negotiations with the external evaluation of projects. However, the effectiveness almost entirely depends on the evaluation quality, but external evaluation seldom reduces the knowledge asymmetry for innovation projects. We propose an iterative revelation mechanism for this problem when the investor sequentially offers possible allocations of the limited budget in the form of threshold dividing questions. The binary choices of innovators serve as a signal of internal estimates of the project implementation costs. Under perfect information, such a mechanism, regardless of the method for determining budget allocations, always produces an effective allocation in subgame-perfect Nash equilibrium. Under uncertainty, the method of offering distribution options matters – the optimal solution is found under the English auction class of mechanisms. In an efficient iterative allocation mechanism for innovation investment, the investor proposes a new allocation of the budget each round until an efficient allocation is achieved. The proposed mechanism does not necessarily need to identify the exact minimum budgets for each innovator. Another advantage of the proposed mechanism is the ability to use different processes for organizing rounds.
© The Authors, published by EDP Sciences, 2021
This is an Open Access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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