Ridge distributions and information design in simultaneous all-pay auction contests

Zhonghong Kuang, Hangcheng Zhao and Jie Zheng

Games and Economic Behavior, 2024, vol. 148, issue C, 218-243

Abstract: Two privately informed contestants compete in a contest, and the organizer ex-ante designs a public anonymous disclosure policy to maximize the contestants' total effort. We fully characterize ridge distributions, under which the organizer achieves the first-best outcome in equilibrium: the allocation is efficient, and the entire surplus goes to the organizer. When the prior is a mixture of a ridge distribution and a perfectly correlated distribution, the first-best outcome is achievable by a signal that solely generates ridge distributions as posteriors.

Keywords: Type correlation; Bayesian persuasion; Information design; All-pay auction contest; Information disclosure; Ridge distribution (search for similar items in EconPapers)
JEL-codes: C72 D72 D82 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:148:y:2024:i:c:p:218-243

DOI: 10.1016/j.geb.2024.09.009

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