Signaling In A Dynamic Contest With Boundedly Rational Players
AbstractI consider a two-stage (dynamic) elimination contest with uninformed and informed players. Informed players can signal their type to future uninformed opponents through their efforts in the first stage. Uninformed players might make wrong inferences. It is in this sense that they are boundedly rational. Relative to the benchmark case of complete information, I find that there exists an equilibrium in which an informed player exerts a higher effort in the semi-final in the incomplete-information version of the game, if the uninformed player is sufficiently weak. The informed player exerts a smaller effort, if the uninformed player is sufficiently strong. Intuitively, informed players may want to scare future uninformed opponents by exerting higher efforts in earlier rounds. However, trying to scare a very strong player may not be a sensible strategy because he might compete very fiercely. Surprisingly, I find that a higher semi-final effort by the informed player is not necessarily interpreted by the uninformed player as a signal of higher ability.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by University of Guelph, Department of Economics and Finance in its series Working Papers with number 0510.
Length: 24 pages
Date of creation: 2005
Date of revision:
bounded rationality; dynamic contests; signaling; subjective beliefs.;
Find related papers by JEL classification:
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Matthew Rabin, 2002.
"Inference By Believers In The Law Of Small Numbers,"
The Quarterly Journal of Economics,
MIT Press, vol. 117(3), pages 775-816, August.
- Rabin, Matthew, 2000. "Inference by Believers in the Law of Small Numbers," Department of Economics, Working Paper Series qt4sw8n41t, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Matthew Rabin, 2001. "Inference by Believers in the Law of Small Numbers," Method and Hist of Econ Thought 0012002, EconWPA.
- Matthew Rabin., 2000. "Inference by Believers in the Law of Small Numbers," Economics Working Papers E00-282, University of California at Berkeley.
- William Stein & Amnon Rapoport, 2005. "Symmetric two-stage contests with budget constraints," Public Choice, Springer, vol. 124(3), pages 309-328, September.
- Goeree, Jacob K., 2003. "Bidding for the future: signaling in auctions with an aftermarket," Journal of Economic Theory, Elsevier, vol. 108(2), pages 345-364, February.
- Christian Groh & Benny Moldovanu & Aner Sela & Uwe Sunde, 2012.
"Optimal seedings in elimination tournaments,"
Springer, vol. 49(1), pages 59-80, January.
- Groh, Christian & Moldovanu, Benny & Sela, Aner & Sunde, Uwe, 2003. "Optimal Seedings in Elimination Tournaments," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 140, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Hurley, Terrance M. & Shogren, Jason F., 1998. "Effort levels in a Cournot Nash contest with asymmetric information," Journal of Public Economics, Elsevier, vol. 69(2), pages 195-210, June.
- Rick Harbaugh & Tilman Klumpp, 2004.
"Early Round Upsets and Championship Blowouts,"
2004-09, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
- Wärneryd, Karl, 2000.
"Information in Conflicts,"
Working Paper Series in Economics and Finance
388, Stockholm School of Economics.
- Wärneryd, Karl, 2001. "Information in conflicts," Discussion Papers, Research Unit: Market Processes and Governance FS IV 01-11, Social Science Research Center Berlin (WZB).
- Amegashie, J Atsu, 1999. " The Design of Rent-Seeking Competitions: Committees, Preliminary and Final Contests," Public Choice, Springer, vol. 99(1-2), pages 63-76, April.
- Richard Cornes & Roger Hartley, 2002.
"Asymmetric Contests with General Technologies,"
Keele Economics Research Papers
KERP 2002/22, Centre for Economic Research, Keele University.
- Johannes H�rner & Nicolas Sahuguet, 2007. "Costly Signalling in Auctions -super-1," Review of Economic Studies, Oxford University Press, vol. 74(1), pages 173-206.
- Clark, Derek J & Riis, Christian, 1998. "Competition over More Than One Prize," American Economic Review, American Economic Association, vol. 88(1), pages 276-89, March.
- Martin Osborne & Ariel Rubinstein, 2002.
"Sampling Equilibrium with an Application to Strategic Voting,"
Levine's Working Paper Archive
506439000000000037, David K. Levine.
- Osborne, Martin J. & Rubinstein, Ariel, 2003. "Sampling equilibrium, with an application to strategic voting," Games and Economic Behavior, Elsevier, vol. 45(2), pages 434-441, November.
- Lipman, Barton L, 1991. "How to Decide How to Decide How to. . . : Modeling Limited Rationality," Econometrica, Econometric Society, vol. 59(4), pages 1105-25, July.
- Moldovanu, Benny & Sela, Aner, 2006.
Journal of Economic Theory,
Elsevier, vol. 126(1), pages 70-96, January.
- Colin F. Camerer & Teck-Hua Ho & Juin-Kuan Chong, 2004. "A Cognitive Hierarchy Model of Games," The Quarterly Journal of Economics, MIT Press, vol. 119(3), pages 861-898, August.
- Gradstein, Mark & Konrad, Kai A, 1999. "Orchestrating Rent Seeking Contests," Economic Journal, Royal Economic Society, vol. 109(458), pages 536-45, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stephen Kosempel).
If references are entirely missing, you can add them using this form.