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Disclosure policy in a multi-prize all-pay auction with stochastic abilities

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  • Fu, Qiang
  • Jiao, Qian
  • Lu, Jingfeng

Abstract

This paper investigates whether a contest organizer should disclose private information about bidders’ abilities in a multi-prize all-pay auction. Bidders’ abilities are randomly distributed and observed by the contest organizer; the organizer decides whether to disclose this information publicly. We find that concealing the information elicits higher expected total effort, regardless of the distribution of abilities. In addition, we find that the rent-dissipation rate of the contest does not depend on the disclosure policy.

Suggested Citation

  • Fu, Qiang & Jiao, Qian & Lu, Jingfeng, 2014. "Disclosure policy in a multi-prize all-pay auction with stochastic abilities," Economics Letters, Elsevier, vol. 125(3), pages 376-380.
    • Handle: RePEc:eee:ecolet:v:125:y:2014:i:3:p:376-380
    DOI: 10.1016/j.econlet.2014.10.014
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    References listed on IDEAS

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    1. Benny Moldovanu & Aner Sela, 2001. "The Optimal Allocation of Prizes in Contests," American Economic Review, American Economic Association, vol. 91(3), pages 542-558, June.
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    6. Morath, Florian & Münster, Johannes, 2008. "Private versus complete information in auctions," Economics Letters, Elsevier, vol. 101(3), pages 214-216, December.
    7. Lim, Wooyoung & Matros, Alexander, 2009. "Contests with a stochastic number of players," Games and Economic Behavior, Elsevier, vol. 67(2), pages 584-597, November.
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    10. Dan Kovenock & Florian Morath & Johannes Münster, 2015. "Information Sharing in Contests," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 24(3), pages 570-596, September.
    11. Denter, Philipp & Morgan, John & Sisak, Dana, 2011. ""Where Ignorance is Bliss, 'tis Folly to be Wise": Transparency in Contests," Economics Working Paper Series 1128, University of St. Gallen, School of Economics and Political Science.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Todd R. Kaplan & David Wettstein, 2022. "Two-stage contests with preferences over style," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 74(4), pages 1141-1161, November.
    2. Ford, Weixing & Lian, Zeng & Lien, Jaimie W. & Zheng, Jie, 2020. "Information sharing in a contest game with group identity," Economics Letters, Elsevier, vol. 189(C).
    3. Chen, Bo, 2020. "Disclosure policies in research contests with stochastic entry," Economics Letters, Elsevier, vol. 191(C).
    4. Jingfeng Lu & Hongkun Ma & Zhe Wang, 2018. "Ranking Disclosure Policies In All‐Pay Auctions," Economic Inquiry, Western Economic Association International, vol. 56(3), pages 1464-1485, July.
    5. Chen, Zhuoqiong, 2021. "Optimal information exchange in contests," Journal of Mathematical Economics, Elsevier, vol. 96(C).
    6. Zhuoqiong Chen, 2021. "All-pay auctions with private signals about opponents’ values," Review of Economic Design, Springer;Society for Economic Design, vol. 25(1), pages 33-64, June.
    7. Feng, Xin, 2020. "Information disclosure on the contest mechanism," Journal of Mathematical Economics, Elsevier, vol. 91(C), pages 148-156.
    8. Lu, Jingfeng & Ma, Hongkun & Wang, Zhewei, 2023. "Information sharing decisions in all-pay auctions with correlated types," Journal of Mathematical Economics, Elsevier, vol. 107(C).
    9. Christian Ewerhart & Julia Lareida, 2018. "Voluntary disclosure in asymmetric contests," ECON - Working Papers 279, Department of Economics - University of Zurich, revised Jul 2023.
    10. Chen, Bo & Jiang, Xiandeng & Knyazev, Dmitriy, 2017. "On disclosure policies in all-pay auctions with stochastic entry," Journal of Mathematical Economics, Elsevier, vol. 70(C), pages 66-73.
    11. Luke Boosey & Philip Brookins & Dmitry Ryvkin, 2020. "Entry in group contests," Working Papers wp2020_02_01, Department of Economics, Florida State University.
    12. Xin Feng, 2023. "Information disclosure in all-pay contests with costly entry," International Journal of Game Theory, Springer;Game Theory Society, vol. 52(2), pages 401-421, June.
    13. Marco Serena, 2017. "Harnessing Beliefs to Stimulate Efforts; on the Optimal Disclosure Policy in Contests," Working Papers tax-mpg-rps-2018-11, Max Planck Institute for Tax Law and Public Finance.
    14. Shanglyu Deng & Hanming Fang & Qiang Fu & Zenan Wu, 2020. "Confidence Management in Tournaments," NBER Working Papers 27186, National Bureau of Economic Research, Inc.
    15. Subhasish M. Chowdhury & Patricia Esteve‐González & Anwesha Mukherjee, 2023. "Heterogeneity, leveling the playing field, and affirmative action in contests," Southern Economic Journal, John Wiley & Sons, vol. 89(3), pages 924-974, January.
    16. Chen, Bo & Ma, Lijun & Zhu, Zhaobo & Zhou, Yu, 2020. "Disclosure policies in all-pay auctions with bid caps and stochastic entry," Economics Letters, Elsevier, vol. 186(C).
    17. Marco Serena, 2022. "Harnessing beliefs to optimally disclose contestants’ types," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 74(3), pages 763-792, October.
    18. Chen, Bo & Serena, Marco, 2023. "Disclosure Policies in All-Pay Auctions with Bid Caps," Journal of Economic Behavior & Organization, Elsevier, vol. 209(C), pages 141-160.

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    More about this item

    Keywords

    All-pay auction; Disclosure; Concealment; Stochastic abilities;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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