A Max-Min Two-Group Contest with Binary Actions and Incomplete Information à la Global Games

Davide Bosco, Mario Gilli and Andrea Sorrentino

No 545, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: The main novelty of this paper is the introduction of incomplete information à la global games into max-min group contests with binary actions. Depending on whether the complete information assumption is relaxed on the value of the prize or on the cost of providing effort, we obtain different results in terms of equilibrium selection: in the first case, there exist both an equilibrium in (monotonic) switching strategies and an equilibrium robust to incomplete information in the sense of Kajii and Morris [1997], in which no player exerts effort in both groups, whereas in the second one there exists a unique equilibrium in (monotonic) switching-strategies. Then, we discuss the presence of the group-size paradox for both classes of games. The results are thus extended to the case of M groups, and the properties of Bayes-Nash equilibria for these classes of games are investigated. Finally, we show a limit-uniqueness and a noise independent selection result.

Keywords: Group contests; incomplete information; global games. (search for similar items in EconPapers)
JEL-codes: C72 D71 D74 (search for similar items in EconPapers)
Pages: 55
Date: 2024-10, Revised 2025-03
New Economics Papers: this item is included in nep-gth and nep-mic
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Related works:
Working Paper: A Max-Min Two-Group Contest with Binary Actions and Incomplete Information à la Global Games (2024)
Working Paper: A Max-Min Two-Group Contest with Binary Actions and Incomplete Information à la Global Games (2024)
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