Harnessing beliefs to optimally disclose contestants’ types

Marco Serena

Economic Theory, 2022, vol. 74, issue 3, No 3, 763-792

Abstract: 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 high-types are more (less) likely than low-types. However, regardless of the likelihood of types, the optimal policy is that of contingent disclosure; it is optimal to commit to disclosing if both contestants are high types and concealing otherwise.

Keywords: Contests; Strategic complements; Strategic substitutes; Information (search for similar items in EconPapers)
JEL-codes: C72 D82 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (9)

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DOI: 10.1007/s00199-021-01378-1

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