Harnessing Beliefs to Stimulate Efforts; on the Optimal Disclosure Policy in Contests

A contestant´s effort depends on her knowledge of her rival´s type. This knowledge is often limited in real-life contests. We propose a model where the principal of a contest has commitment power to verifiably disclose contestants´ types. We investigate the optimal disclosure policy to stimulate contestants´ efforts. Full disclosure stimulates more (less) effort than full concealment if the distribution of types is skewed toward high- (low-) types. However, regardless of the skewness, the optimal policy is to partially disclose; it is optimal to commit to disclose if the realization of types is most favorable to the principal and conceal otherwise.