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Entrant-optimal learning in a contest game

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  • Lian, Zeng
  • Xu, Shuo
  • Zheng, Jie

Abstract

We consider a private value single-prize asymmetric information Tullock contest between an incumbent and an entrant. The incumbent’s prize value is common knowledge, whereas the entrant is uncertain about her value and strategically acquires information to learn about it before the contest. Inspired by Roesler and Szentes (2017), we study how the entrant’s endogenous learning influences strategic contest effort choices. The entrant faces a tradeoff between more uncertainty about her value and less intense competition. If the entrant’s value is ex ante weakly lower than the incumbent’s value, full learning is the optimal strategy. However, if the entrant’s value is ex ante the higher one, no learning can be more advantageous than full learning.

Suggested Citation

  • Lian, Zeng & Xu, Shuo & Zheng, Jie, 2025. "Entrant-optimal learning in a contest game," Journal of Mathematical Economics, Elsevier, vol. 120(C).
    • Handle: RePEc:eee:mateco:v:120:y:2025:i:c:s0304406825000746
    DOI: 10.1016/j.jmateco.2025.103157
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • 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
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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