Information advantage in common-value classic Tullock contests
Diego Moreno (),
A. Selay and
UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía
We show that in a common-value classic Tullock contests with incomplete information a player's information advantage is rewarded. Interestingly, in two-player contests both players exert the same expected effort. We characterize the equilibrium of two-player contests in which a player has information advantage, and show that this player exerts a larger effort and wins the price with a larger probability the larger is the realized value of the prize, although he wins the prize less frequently than his opponent. In addition, we find that players may exert more effort in a Tullock contest than in an all-pay auction.
Keywords: Information; advantage; Asymmetric; information; Common-value; Tullock; contests (search for similar items in EconPapers)
JEL-codes: C72 D44 D82 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth and nep-mic
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Working Paper: Information Advantage in Common-Value Classic Tullock Contests (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:cte:werepe:23939
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