Harnessing Beliefs to Stimulate Efforts; on the Optimal Disclosure Policy in Contests

Marco Serena

Working Papers from Max Planck Institute for Tax Law and Public Finance

Abstract: A contestant´s effort depends on her knowledge of her rival´s type. This knowledge is often limited in real-life contests. We propose a model where the principal of a contest has commitment power to verifiably disclose contestants´ types. We investigate the optimal disclosure policy to stimulate contestants´ efforts. Full disclosure stimulates more (less) effort than full concealment if the distribution of types is skewed toward high- (low-) types. However, regardless of the skewness, the optimal policy is to partially disclose; it is optimal to commit to disclose if the realization of types is most favorable to the principal and conceal otherwise.

Keywords: Contests; Strategic Complements; Strategic Substitutes; Skewness; Information. (search for similar items in EconPapers)
JEL-codes: C72 D82 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2017-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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