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Tullock Contests with Asymmetric Information

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  • Einy, E
  • Haimanko, O
  • Moreno, D
  • Sela, A
  • Shitovitz, B
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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. Moreover, when players have a common value and a common state independent linear cost function, a two player Tullock contest in which one player has an information advantage has a unique equilibrium. In this equilibrium both players exert the same expected effort, although the player with information advantage has a greater payoff and wins the prize less frequently than his opponent. When there are more than two players in the contest, an information advantage leads to higher payoffs, but the other properties of equilibrium no longer hold.

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    File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/25902/1/070econDP13-11.pdf
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    Bibliographic Info

    Paper provided by Graduate School of Economics, Hitotsubashi University in its series Discussion Papers with number 2013-11.

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    Length: 25 p.
    Date of creation: Sep 2013
    Date of revision:
    Handle: RePEc:hit:econdp:2013-11

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