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Information alliances in contests with budget limits

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  • Konrad, Kai A.

Abstract

We study the role of information exchange through alliances in a framework with contestants who have binding budget limits and know their own budget limit but are incompletely informed about other contestants' budget limits. First, we solve for the Bayesian Nash equilibrium. Then we consider the role of information exchange through alliances. Contestants learn the budget limits of all players who are within the same alliance, and then decide independently about their own contest efforts. This type of alliance formation is beneficial for alliance members and neutral for players who do not belong to the alliance. Also, a merger between alliances is beneficial for their members. Further, we consider merger between alliances and discuss the set of stable combinations of alliances. --

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Bibliographic Info

Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" with number SP II 2010-21.

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Date of creation: 2010
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Handle: RePEc:zbw:wzbfff:spii201021

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Keywords: Contest; budget limits; incomplete information; alliances; information sharing;

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References

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Cited by:
  1. Kai A. Konrad & Thomas R. Cusack, 2013. "Hanging Together or Being Hung Separately: The Strategic Power of Coalitions where Bargaining Occurs with Incomplete Information," CESifo Working Paper Series 4071, CESifo Group Munich.
  2. Konrad, Kai A. & Cusack, Thomas R., 2013. "Hanging Together or Being Hung Separately: The Strategic Power of Coalitions where Bargaining Occurs with Incomplete Information," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79967, Verein für Socialpolitik / German Economic Association.

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