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Information acquisition in conflicts

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  • Morath, Florian
  • Münster, Johannes

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.

Suggested Citation

  • Morath, Florian & Münster, Johannes, 2010. "Information acquisition in conflicts," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 314, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    • Handle: RePEc:trf:wpaper:314
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    Cited by:

    1. Spencer Bastani & Thomas Giebe & Oliver Gürtler, 2019. "A General Framework for Studying Contests," CESifo Working Paper Series 7993, CESifo.
    2. Tri Vi Dang & Florian Morath, 2013. "The Taxation of Bilateral Trade with Endogenous Information," Working Papers tax-mpg-rps-2013-07, Max Planck Institute for Tax Law and Public Finance.
    3. Sharma, Priyanka & Wagman, Liad, 2020. "Advertising and Voter Data in Asymmetric Political Contests," Information Economics and Policy, Elsevier, vol. 52(C).
    4. Qiang Fu & Jingfeng Lu & Yue Pan, 2015. "Team Contests with Multiple Pairwise Battles," American Economic Review, American Economic Association, vol. 105(7), pages 2120-2140, July.
    5. Jingfeng Lu & Hongkun Ma & Zhe Wang, 2018. "Ranking Disclosure Policies In All‐Pay Auctions," Economic Inquiry, Western Economic Association International, vol. 56(3), pages 1464-1485, July.
    6. repec:zbw:rwirep:0544 is not listed on IDEAS
    7. Lars P. Metzger, 2015. "Alliance Formation in Contests with Incomplete Information," Ruhr Economic Papers 0544, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    8. Kai A. Konrad & Florian Morath, 2018. "To Deter Or To Moderate? Alliance Formation In Contests With Incomplete Information," Economic Inquiry, Western Economic Association International, vol. 56(3), pages 1447-1463, July.
    9. Fu, Qiang & Gürtler, Oliver & Münster, Johannes, 2013. "Communication and commitment in contests," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 1-19.
    10. Ezra Einy & Diego Moreno & Benyamin Shitovitz, 2017. "The value of public information in common-value Tullock contests," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 63(4), pages 925-942, April.
    11. Florian Morath, 2013. "Volunteering and the strategic value of ignorance," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 41(1), pages 99-131, June.
    12. Seel, Christian, 2014. "The value of information in asymmetric all-pay auctions," Games and Economic Behavior, Elsevier, vol. 86(C), pages 330-338.
    13. Häfner, Samuel, 2017. "A tug-of-war team contest," Games and Economic Behavior, Elsevier, vol. 104(C), pages 372-391.
    14. Chen, Bo & Chen, Bo, 2024. "Optimal disclosure in all-pay auctions with interdependent valuations," Games and Economic Behavior, Elsevier, vol. 143(C), pages 204-222.
    15. Bastani, Spencer & Giebe, Thomas & Gürtler, Oliver, 2022. "Simple equilibria in general contests," Games and Economic Behavior, Elsevier, vol. 134(C), pages 264-280.
    16. 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.
    17. Bilancini, Ennio & Boncinelli, Leonardo, 2018. "Signaling with costly acquisition of signals," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 141-150.
    18. Metzger, Lars P., 2015. "Alliance Formation in Contests with Incomplete Information," Ruhr Economic Papers 544, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    19. Vitali Gretschko & Achim Wambach, 2014. "Information acquisition during a descending auction," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 55(3), pages 731-751, April.

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    More about this item

    Keywords

    All-pay auctions; Conflicts; Contests; Information acquisition;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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