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Tullock Contests With Asymmetric Information

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  • Ezra Einy

    ()
    (Department of Economics, Ben-Gurion University of the Negev, Israel)

  • Ori Haimanko

    ()
    (Department of Economics, Ben-Gurion University of the Negev, Israel)

  • Diego Moreno

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

  • Aner Sela

    ()
    (Department of Economics, Ben-Gurion University of the Negev. Israel)

  • Benyamin Shitovitz

    (Department of Economics, University of Haifa)

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    Abstract

    Under standard assumptions about players'cost functions, we show that a Tullock contest with asymmetric information has a pure strategy equilibrium. Next we study Tullock contests in which players have a common value and a common state-independent linear cost function. A two-player contest in which one player has an information advantage has a unique equilibrium. In equilib- rium both players exert the same expected effort, and although the player with an information advantage wins the prize with probability less than one-half, his payoff is greater or equal to that of his opponent. When there are more than two players in the contest, having information advantage leads to higher payoffs, but the other properties of equilibrium no longer hold.

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    File URL: http://www.ec.bgu.ac.il/monaster/admin/papers/1303.pdf
    File Function: First version, 2013
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    Bibliographic Info

    Paper provided by Ben-Gurion University of the Negev, Department of Economics in its series Working Papers with number 1303.

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    Length: 28 pages
    Date of creation: 2013
    Date of revision:
    Handle: RePEc:bgu:wpaper:1303

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    References

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