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The Value of Public Information in Common-Value Tullock Contests

Author

Listed:
  • Ezra Einy

    (BGU)

  • Diego Moreno

    (Departamento de Economia, Universidad Carlos III de Madrid, Spain)

  • Benyamin Shitovitz

    (Department of Economics, University of Haifa, Israel)

Abstract

We study how changes in the information available to the players of a symmetric common-value Tullock contest with incomplete information affect their payoffs and their incentives to exert effort. For the class of contests where players' state dependent cost of effort is multiplicative, we show that if the players' Arrow-Pratt measure of relative risk aversion is increasing (decreasing), then the value of Public information is positive (negative). Moreover, if players' cost of effort (value) is state independent, then players' effort decreases (increases) with the level of information.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Ezra Einy & Diego Moreno & Benyamin Shitovitz, 2014. "The Value of Public Information in Common-Value Tullock Contests," Working Papers 1408, Ben-Gurion University of the Negev, Department of Economics.
    • Handle: RePEc:bgu:wpaper:1408
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    References listed on IDEAS

    as
    1. Christian Ewerhart & Federico Quartieri, 2020. "Unique equilibrium in contests with incomplete information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 70(1), pages 243-271, July.
    2. Einy, E. & Haimanko, O. & Moreno, D. & Sela, A. & Shitovitz, B., 2015. "Equilibrium existence in Tullock contests with incomplete information," Journal of Mathematical Economics, Elsevier, vol. 61(C), pages 241-245.
    3. Vohra, Rajiv, 1999. "Incomplete Information, Incentive Compatibility, and the Core," Journal of Economic Theory, Elsevier, vol. 86(1), pages 123-147, May.
    4. Einy, E & Haimanko, O & Moreno, D & Sela, A & Shitovitz, B, 2013. "Tullock Contests with Asymmetric Information," Discussion Papers 2013-11, Graduate School of Economics, Hitotsubashi University.
    5. Florian Morath & Johannes Münster, 2013. "Information acquisition in conflicts," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 54(1), pages 99-129, September.
    6. Warneryd, Karl, 2003. "Information in conflicts," Journal of Economic Theory, Elsevier, vol. 110(1), pages 121-136, May.
    7. Einy, Ezra & Moreno, Diego & Shitovitz, Benyamin, 2003. "The value of public information in a Cournot duopoly," Games and Economic Behavior, Elsevier, vol. 44(2), pages 272-285, August.
    8. Cédric Wasser, 2013. "Incomplete information in rent-seeking contests," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 53(1), pages 239-268, May.
    9. Dan Kovenock & Florian Morath & Johannes Münster, 2015. "Information Sharing in Contests," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 24(3), pages 570-596, September.
    10. Denter, Philipp & Morgan, John & Sisak, Dana, 2011. ""Where Ignorance is Bliss, 'tis Folly to be Wise": Transparency in Contests," Economics Working Paper Series 1128, University of St. Gallen, School of Economics and Political Science.
    11. Roger Myerson & Karl Wärneryd, 2006. "Population uncertainty in contests," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 27(2), pages 469-474, January.
    12. Skaperdas, Stergios & Gan, Li, 1995. "Risk Aversion in Contests," Economic Journal, Royal Economic Society, vol. 105(431), pages 951-962, July.
    13. Szidarovszky, Ferenc & Okuguchi, Koji, 1997. "On the Existence and Uniqueness of Pure Nash Equilibrium in Rent-Seeking Games," Games and Economic Behavior, Elsevier, vol. 18(1), pages 135-140, January.
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    Cited by:

    1. Christian Ewerhart & Federico Quartieri, 2020. "Unique equilibrium in contests with incomplete information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 70(1), pages 243-271, July.
    2. Ezra Einy & Diego Moreno & Aner Sela, 2020. "Continuity and robustness of Bayesian equilibria in Tullock contests," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(2), pages 333-345, October.
    3. Cohen, Din & Sela, Aner, 2020. "Common-value group contests with asymmetric information," Economics Letters, Elsevier, vol. 192(C).
    4. Alejandro Melo Ponce, 2018. "The Secret Behind The Tortoise and the Hare: Information Design in Contests," 2018 Papers pme809, Job Market Papers.
    5. A. Aiche & E. Einy & O. Haimanko & D. Moreno & A. Sela & B. Shitovitz, 2019. "Information in Tullock contests," Theory and Decision, Springer, vol. 86(3), pages 303-323, May.
    6. Fu, Qiang & Wu, Zenan & Zhu, Yuxuan, 2022. "On equilibrium existence in generalized multi-prize nested lottery contests," Journal of Economic Theory, Elsevier, vol. 200(C).
    7. Christian Ewerhart & Julia Lareida, 2018. "Voluntary disclosure in asymmetric contests," ECON - Working Papers 279, Department of Economics - University of Zurich, revised Jul 2023.
    8. Roy, Jaideep & Silvers, Randy & Sun, Ching-Jen, 2019. "Majoritarian preference, utilitarian welfare and public information in Cournot oligopoly," Games and Economic Behavior, Elsevier, vol. 116(C), pages 269-288.

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    More about this item

    Keywords

    Tullock Contests; Common-Values; Value of Public Information;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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