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Ridge distributions and information design in simultaneous all-pay auction contests

Author

Listed:
  • Kuang, Zhonghong
  • Zhao, Hangcheng
  • Zheng, Jie

Abstract

Two privately informed contestants compete in a contest, and the organizer ex-ante designs a public anonymous disclosure policy to maximize the contestants' total effort. We fully characterize ridge distributions, under which the organizer achieves the first-best outcome in equilibrium: the allocation is efficient, and the entire surplus goes to the organizer. When the prior is a mixture of a ridge distribution and a perfectly correlated distribution, the first-best outcome is achievable by a signal that solely generates ridge distributions as posteriors.

Suggested Citation

  • Kuang, Zhonghong & Zhao, Hangcheng & Zheng, Jie, 2024. "Ridge distributions and information design in simultaneous all-pay auction contests," Games and Economic Behavior, Elsevier, vol. 148(C), pages 218-243.
    • Handle: RePEc:eee:gamebe:v:148:y:2024:i:c:p:218-243
    DOI: 10.1016/j.geb.2024.09.009
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    More about this item

    Keywords

    Type correlation; Bayesian persuasion; Information design; All-pay auction contest; Information disclosure; Ridge distribution;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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