Information acquisition in all-pay contests

Xin Feng and Shuangteng Song

Economics Letters, 2025, vol. 256, issue C

Abstract: This paper analyzes type-dependent information acquisition in an all-pay contest where two privately informed players can pay a fixed cost to learn their opponent’s type. We analyze and contrast two settings: one where this acquisition decision is covert (unobservable) and one where it is public (observable). Although information is only acquired below a cost threshold in both cases, the public setting creates a crucial strategic tension. The observable act of acquisition can discourage high-type players who wish to conceal their strength, while it may incentivize low-type players who can use the action to signal strength. These findings demonstrate that the option to acquire information is not just a preliminary step but a crucial strategic layer that endogenously shapes the contest’s information structure and influences subsequent efforts and outcomes.

Keywords: Information acquisition; All-pay contests (search for similar items in EconPapers)
JEL-codes: C72 D74 D82 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:256:y:2025:i:c:s0165176525004227

DOI: 10.1016/j.econlet.2025.112585

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