Arbeitspapier

Voluntary disclosure in unfair contests

This paper studies incentives for the interim voluntary disclosure of verifiable information in probabilistic all-pay contests. Considered are unfair contests, i.e., contests in which, subject to activity conditions, one player (the favorite) is interim always more likely to win than the other player (the underdog). A condition is identified that ensures that a given contest is unfair regardless of disclosure decisions. Under this condition, full revelation is the unique perfect Bayesian equilibrium outcome of the contest with pre-play communication. This is so because the weakest type of the underdog will try to moderate the favorite, while the strongest type of the favorite will try to discourage the underdog - so that the contest unravels. We also show that self-disclosure may, with positive probability, provoke unintended reactions, i.e., "dominant" or "defiant" behavior. Moreover, while individually rational for the marginal type, the unraveling may be strictly Pareto inferior from an ex-ante perspective. Our main conclusion is just the opposite of the corresponding finding for the deterministic all-pay auction. The proofs employ lattice-theoretic methods and an improved version of Jensen's inequality.

Sprache
Englisch

Erschienen in
Series: Working Paper ; No. 279

Klassifikation
Wirtschaft
Noncooperative Games
Conflict; Conflict Resolution; Alliances; Revolutions
Asymmetric and Private Information; Mechanism Design
Labor Discrimination
Thema
Unfair contests
incomplete information
self-disclosure
unraveling
strategic complements and substitutes
dominance and defiance

Ereignis
Geistige Schöpfung
(wer)
Ewerhart, Christian
Grünseis, Julia
Ereignis
Veröffentlichung
(wer)
University of Zurich, Department of Economics
(wo)
Zurich
(wann)
2018

DOI
doi:10.5167/uzh-149332
Handle
Letzte Aktualisierung
20.09.2024, 08:24 MESZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Ewerhart, Christian
  • Grünseis, Julia
  • University of Zurich, Department of Economics

Entstanden

  • 2018

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