Partial Verifiability Induced Contests

Octavian Strimbu

Cahiers de Recherches Economiques du Département d'économie from Université de Lausanne, Faculté des HEC, Département d’économie

Abstract: In a simple common agency (a first-price menu auction with two bidders), the interest groups compete for the political prize awarded by an official. I show that if in the complete information setting one drops the perfect verifiability of the outcome assumption, the ensuing game turns out to be a contest. As the conicting interest groups observe but may only partially verify the policy chosen by the official, they will play mixed strategies. I characterize these strategies and the interest groups'betting behaviour relative to their verification technologies. The probability of getting an inefficient policy as outcome of the inuence game is derived from the equilibrium strategies.

Keywords: Contests; Common agency; Partial verifiability (search for similar items in EconPapers)
JEL-codes: D44 D72 D80 (search for similar items in EconPapers)
Pages: 21 pp.
Date: 2022-04
New Economics Papers: this item is included in nep-gth and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:lau:crdeep:22.05

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