Information acquisition in conflicts

Florian Morath and Johannes Münster

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: This paper considers incentives for information acquisition ahead of conflicts. First, we characterize the (unique) equilibrium of the all-pay auction between two players with one-sided asymmetric information where one player has private information about his valuation. Then, we use ou rresults to study information acquisition prior to an all-pay auction. If the decision to acquire information is observable, but not the informatio nreceived, one-sided asymmetric information can occur endogenously in equilibrium. Moreover, the cutoff values of the cost of information that determine equilibrium information acquisition are higher than in the first best. Thus, information acquisition is excessive. Incontrast, with open or covert information acquisition, the equilibrium cut-off values are as in the first best.

Keywords: All-pay auctions; Conflicts; Contests; Information acquisition (search for similar items in EconPapers)
JEL-codes: D72 D74 D82 D83 (search for similar items in EconPapers)
Date: 2010-03
New Economics Papers: this item is included in nep-cta
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Citations: View citations in EconPapers (9)

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Related works:
Journal Article: Information acquisition in conflicts (2013)
Working Paper: Information acquisition in conflicts (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:trf:wpaper:314

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