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Ambiguous persuasion in contests

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  • Feng, Xin

Abstract

We study optimal information disclosure via an ambiguous persuasion approach in a two-player contest. The designer can precommit to an ambiguous device to influence the uninformed contestant's belief about his opponent's private type. We fully characterize the optimal ambiguous information structures when players are maxmin expected utility (MMEU) maximizers. Depending on the prior, it is optimal to either induce ambiguity or fully conceal information. We provide a necessary and sufficient condition under which an effort-maximizing organizer can benefit strictly more from using ambiguous persuasion than from using the optimal Bayesian device.

Suggested Citation

  • Feng, Xin, 2024. "Ambiguous persuasion in contests," Journal of Economic Behavior & Organization, Elsevier, vol. 220(C), pages 182-201.
    • Handle: RePEc:eee:jeborg:v:220:y:2024:i:c:p:182-201
    DOI: 10.1016/j.jebo.2024.02.005
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    More about this item

    Keywords

    Contests; Bayesian persuasion; Ambiguity aversion; Information disclosure;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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