Optimal disclosure in all-pay auctions with interdependent valuations

Bo Chen and Bo Chen

Games and Economic Behavior, 2024, vol. 143, issue C, 204-222

Abstract: We study all-pay auctions with one-sided private information and interdependent valuations. To sharpen the competition and maximize revenue, the auction organizer can design an information disclosure policy through Bayesian persuasion about the bidder with private information. We characterize optimal disclosure and find that optimal disclosure exhibits almost full disclosure, where the uninformed bidder can always narrow the informed bidder's private information down to at most two types. We also illustrate our characterization in a simple binary-type setting and investigate issues such as comparative statics, welfare, and efficiency.

Keywords: All-pay auction; Contest; Bayesian persuasion; Information disclosure; Interdependent valuations (search for similar items in EconPapers)
JEL-codes: C72 D44 D82 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:143:y:2024:i:c:p:204-222

DOI: 10.1016/j.geb.2023.11.010

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