The value of public information in common-value Tullock contests

Ezra Einy, Diego Moreno, Benyamin Shitovitz

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

Abstract

Consider a symmetric common-value Tullock contest with incomplete information in which the players’ cost of effort is the product of a random variable and a deterministic real function of effort, d. We show that the Arrow–Pratt curvature of d, Rd, determines the effect on equilibrium efforts and payoffs of the increased flexibility/reduced commitment that more information introduces into the contest: If Rd is increasing, then effort decreases (increases) with the level of information when the cost of effort (value) is independent of the state of nature. Moreover, if Rd is increasing (decreasing), then the value of public information is nonnegative (nonpositive).

Original languageEnglish
Pages (from-to)925-942
Number of pages18
JournalEconomic Theory
Volume63
Issue number4
DOIs
StatePublished - 1 Apr 2017

Keywords

  • Common values
  • Tullock contests
  • Value of public information

ASJC Scopus subject areas

  • Economics and Econometrics

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