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Information sharing in contests

Author

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  • Kovenock, Dan
  • Morath, Florian
  • Münster, Johannes

Abstract

We study the incentives to share private information ahead of contests, such as markets with promotional competition, procurement contests, or R&D. We consider the cases where firms have (i) independent values and (ii) common values of winning the contest. In both cases, when decisions to share information are made independently, sharing information is strictly dominated. With independent values, an industry-wide agreement to share information can arise in equilibrium. Expected effort is lower with than without information sharing. With common values, an industry-wide agreement to share information never arises in equilibrium. Expected effort is higher with than without information sharing.

Suggested Citation

  • Kovenock, Dan & Morath, Florian & Münster, Johannes, 2010. "Information sharing in contests," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 334, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  • Handle: RePEc:trf:wpaper:334
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    File URL: https://epub.ub.uni-muenchen.de/13220/1/334.pdf
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    Cited by:

    1. repec:eee:ecolet:v:157:y:2017:i:c:p:36-40 is not listed on IDEAS
    2. Kai Konrad, 2012. "Information alliances in contests with budget limits," Public Choice, Springer, vol. 151(3), pages 679-693, June.
    3. Ezra Einy & Diego Moreno & Benyamin Shitovitz, 2014. "The Value of Public Information in Common-Value Tullock Contests," Working Papers 1408, Ben-Gurion University of the Negev, Department of Economics.
    4. Andrzej Kwiatkowski, 2010. "Non-cooperative incentives to share knowledge in competitive environments," Dundee Discussion Papers in Economics 243, Economic Studies, University of Dundee.
    5. Philipp Denter & John Morgan & Dana (D.) Sisak, 2018. "Showing Off or Laying Low? The Economics of Psych-outs," Tinbergen Institute Discussion Papers 18-041/VII, Tinbergen Institute.
    6. Tan, Xu, 2016. "Information revelation in auctions with common and private values," Games and Economic Behavior, Elsevier, vol. 97(C), pages 147-165.
    7. Kai A. Konrad & Florian Morath, 2015. "To deter or to moderate? Alliance formation in contests with incomplete information," Working Papers tax-mpg-rps-2015-15, Max Planck Institute for Tax Law and Public Finance.
    8. 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.
    9. Gregory Pavlov, 2013. "Correlated Equilibria and Communication Equilibria in All-pay Auctions," UWO Department of Economics Working Papers 20132, University of Western Ontario, Department of Economics.
    10. repec:spr:joecth:v:63:y:2017:i:4:d:10.1007_s00199-016-0974-3 is not listed on IDEAS
    11. Christian Ewerhart & Julia Grünseis, 2018. "Voluntary disclosure in unfair contests," ECON - Working Papers 279, Department of Economics - University of Zurich.
    12. Cho, Myeonghwan & Jun, Byung-hill, 2013. "Information sharing with competition," Economics Letters, Elsevier, vol. 119(1), pages 81-84.
    13. Shitovitz, Benyamin & Moreno Ruiz, Diego & Einy, Ezra, 2014. "The value of public information in common value Tullock contests," UC3M Working papers. Economics we1401, Universidad Carlos III de Madrid. Departamento de Economía.

    More about this item

    Keywords

    information sharing; contest; all-pay auction;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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