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The War of Information

Author

Listed:
  • Faruk Gul
  • Wolfgang Pesendorfer

Abstract

We analyse political contests (campaigns) between two parties with opposing interests. Parties provide costly information to voters who choose a policy. The information flow is continuous and stops when both parties quit. Parties' actions are strategic substitutes: increasing one party's cost makes that party provide more and its opponent provide less information. For voters, parties' actions are complements and hence raising the advantaged party's cost may be beneficial. Asymmetric information adds a signalling component resulting in a belief threshold at which the informed party's decision to continue campaigning offsets other unfavourable information. Copyright 2012, Oxford University Press.

Suggested Citation

  • Faruk Gul & Wolfgang Pesendorfer, 2012. "The War of Information," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(2), pages 707-734.
    • Handle: RePEc:oup:restud:v:79:y:2012:i:2:p:707-734
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    File URL: http://hdl.handle.net/10.1093/restud/rds017
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    • Gul, Faruk & Pesendorfer, Wolfgang, 2010. "The War of Information," Papers 9-13-2010, Princeton University, Research Program in Political Economy.

    References listed on IDEAS

    as
    1. Austen-Smith, David, 1994. "Strategic Transmission of Costly Information," Econometrica, Econometric Society, vol. 62(4), pages 955-963, July.
    2. Godfrey Keller & Sven Rady & Martin Cripps, 2005. "Strategic Experimentation with Exponential Bandits," Econometrica, Econometric Society, vol. 73(1), pages 39-68, January.
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