Pre-contest Communication Incentives

Mustafa Yildirim

The B.E. Journal of Theoretical Economics, 2018, vol. 18, issue 1, 21

Abstract: To demonstrate resolution and psychological strength, players often engage in pre-contest communication by publicly stating their desire to win an upcoming contest. Existing explanations for this phenomenon revolve around incomplete information and signaling. In this paper, I offer a complementary explanation that does not rely on signaling. Within a complete information setup, I show that players may have an incentive for pre-contest communication if, in addition to an audience (reputational) cost when the statement does not materialize, the players also incur an audience reward (credibility gain) when the statement materializes.

Keywords: contests; communication; commitment; audience cost (search for similar items in EconPapers)
JEL-codes: C72 O31 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (1)

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DOI: 10.1515/bejte-2016-0096

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