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Common-value contests with asymmetric information

  • Wärneryd, Karl

We consider two-player, perfectly discriminatory, common-value contests (or all-pay auctions), in which one player knows the value of the contested object with certainty, and the other knows only its prior distribution. We show, among other things, that in equilibrium the players win with equal probability. This contrasts with a large class of imperfectly discriminatory contests in which the uninformed player wins with a strictly greater probability than the informed player.

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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 120 (2013)
Issue (Month): 3 ()
Pages: 525-527

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Handle: RePEc:eee:ecolet:v:120:y:2013:i:3:p:525-527
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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  1. Wärneryd, Karl, 2000. "Information in Conflicts," SSE/EFI Working Paper Series in Economics and Finance 388, Stockholm School of Economics.
  2. Gradstein, Mark & Konrad, Kai A, 1999. "Orchestrating Rent Seeking Contests," Economic Journal, Royal Economic Society, vol. 109(458), pages 536-45, October.
  3. Roger Myerson & Karl Wärneryd, 2006. "Population uncertainty in contests," Economic Theory, Springer, vol. 27(2), pages 469-474, January.
  4. Einy, Ezra & Haimanko, Ori & Orzach, Ram & Sela, Aner, 2013. "Common-Value All-Pay Auctions with Asymmetric Information," CEPR Discussion Papers 9315, C.E.P.R. Discussion Papers.
  5. Baye, M. & Kovenock, D. & de Vries, C., 1990. "The All-Pay Auction with Complete Information," Discussion Paper 1990-51, Tilburg University, Center for Economic Research.
  6. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February.
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  8. Wärneryd, Karl, 2012. "The evolution of preferences for conflict," Economics Letters, Elsevier, vol. 116(1), pages 102-104.
  9. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603, March.
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  12. Skaperdas, S., 1991. "Cooperation, Conflict And Power In The Absence Of Property Rights," Papers 90-91-06a, California Irvine - School of Social Sciences.
  13. Warneryd, Karl, 2001. "Replicating contests," Economics Letters, Elsevier, vol. 71(3), pages 323-327, June.
  14. Wärneryd, Karl, 2001. "Rent, risk, and replication: preference adaptation in winner-take-all markets
    [Rente, Risiko und Replikation – Präferenz- Anpassung in „Der-Sieger-bekommt-alles“ Märkten]
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  15. Engelbrecht-Wiggans, Richard & Milgrom, Paul R. & Weber, Robert J., 1983. "Competitive bidding and proprietary information," Journal of Mathematical Economics, Elsevier, vol. 11(2), pages 161-169, April.
  16. Inderst, Roman & Muller, Holger M. & Warneryd, Karl, 2007. "Distributional conflict in organizations," European Economic Review, Elsevier, vol. 51(2), pages 385-402, February.
  17. Arye L. Hillman & John G. Riley, 1987. "Politically Contestable Rents and Transfers," UCLA Economics Working Papers 452, UCLA Department of Economics.
  18. Burkhard Hehenkamp & Wolfgang Leininger & Alex Possajennikov, 2003. "Evolutionary Equilibrium in Tullock Contests: Spite and Overdissipation," Discussion Papers in Economics 03_01, University of Dortmund, Department of Economics.
  19. Bernardo, Antonio E & Talley, Eric & Welch, Ivo, 2000. "A Theory of Legal Presumptions," Journal of Law, Economics and Organization, Oxford University Press, vol. 16(1), pages 1-49, April.
  20. Skaperdas, Stergios, 1996. "Contest Success Functions," Economic Theory, Springer, vol. 7(2), pages 283-90, February.
  21. Hirshleifer, Jack, 1991. "The Technology of Conflict as an Economic Activity," American Economic Review, American Economic Association, vol. 81(2), pages 130-34, May.
  22. Ezra Einy & Ori Haimanko & Ram Orzach & Aner Sela, 2013. "Common-Value All-Pay Auctions With Asymmetric Information," Working Papers 1306, Ben-Gurion University of the Negev, Department of Economics.
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