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Information disclosure in all-pay contests with costly entry

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  • Xin Feng

    (Nanjing University)

Abstract

In this paper, we accommodate the costly entry of contestants and examine an information design problem when the organizer can decide how to generate contestants’ private information. The information designer should take into account both ex ante entry incentives and post-entry effort elicitation. We show that no transparency (full transparency) induces greater expected aggregate effort if the entry cost is lower (higher) than a threshold. We further consider randomized disclosure policies and identify the optimal degree of transparency, which increases with the entry cost to attract entry. In particular, depending on the entry cost, diverse randomized disclosure policies could be optimal. Our results indicate that endogenous participation plays a crucial role in the design of information revelation.

Suggested Citation

  • Xin Feng, 2023. "Information disclosure in all-pay contests with costly entry," International Journal of Game Theory, Springer;Game Theory Society, vol. 52(2), pages 401-421, June.
    • Handle: RePEc:spr:jogath:v:52:y:2023:i:2:d:10.1007_s00182-022-00822-3
    DOI: 10.1007/s00182-022-00822-3
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    More about this item

    Keywords

    All-pay auction; Endogenous entry; Entry cost; Information disclosure;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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