Information disclosure in all-pay contests with costly entry

Xin Feng ()
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Xin Feng: Nanjing University

International Journal of Game Theory, 2023, vol. 52, issue 2, No 3, 421 pages

Abstract: Abstract In this paper, we accommodate the costly entry of contestants and examine an information design problem when the organizer can decide how to generate contestants’ private information. The information designer should take into account both ex ante entry incentives and post-entry effort elicitation. We show that no transparency (full transparency) induces greater expected aggregate effort if the entry cost is lower (higher) than a threshold. We further consider randomized disclosure policies and identify the optimal degree of transparency, which increases with the entry cost to attract entry. In particular, depending on the entry cost, diverse randomized disclosure policies could be optimal. Our results indicate that endogenous participation plays a crucial role in the design of information revelation.

Keywords: All-pay auction; Endogenous entry; Entry cost; Information disclosure (search for similar items in EconPapers)
JEL-codes: D44 D72 D82 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s00182-022-00822-3

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