Disclosure policy in Tullock contests with asymmetric stochastic entry

Qiang Fu, Jingfeng Lu and Jun Zhang

Canadian Journal of Economics, 2016, vol. 49, issue 1, 52-75

Abstract: We examine how disclosure policy can be optimally designed to incentivize contestants when their participation is exogenously stochastic. In a generalized Tullock contest setting with two players who are asymmetric in both their values and entry probabilities, we fully characterize the necessary and sufficient conditions under which no disclosure dominates full disclosure. We find that the comparison depends solely on a balance effect exercised by entry probabilities on the expected total effort. The optimal disclosure policy must better balance the competition. These conditions continue to hold when the precision r of Tullock contests is endogenously chosen by the designer.

JEL-codes: C72 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (16)

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