Information in Tullock contest
Diego Moreno (),
A. Selay and
UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía
We study the effect of changes of players' information on the equilibrium efforts and payoffs of Tullock contests in which the common value of the prize is uncertain. When the diseconomies of scale in exerting effort increase at a large (small) rate, in contests with symmetric information expected effort decreases (increases) as players become better informed, while in two-player contests with asymmetric information a player with information advantage exerts less (more) effort, in expectation, than his opponent. In classic Tullock contests with symmetric information the equilibrium expected effort and pay off are invariant to the information available to the players. And when information is asymmetric, a player's information advantage is rewarded. Moreover, in two-player contests, while both players exert the same expected effort regardless of their information, expected effort is smaller when one player has information advantage than when both players have the same information.Interestingly, the player with information advantage wins the prize less frequently than his opponent.
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-des, nep-gth and nep-mic
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Journal Article: Information in Tullock contests (2019)
Working Paper: INFORMATION IN TULLOCK CONTESTS (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:cte:werepe:25820
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