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"Where Ignorance is Bliss, 'tis Folly to be Wise": Transparency in Contests

  • Denter, Philipp


  • Morgan, John


  • Sisak, Dana


Increasingly, lobbying groups are subject to transparency requirements, obliging them to provide detailed information about their business. We study the effect this transparency policy has on the nature of lobbying competition. Under mild conditions, mandated transparency leads to an increase in wastefulness of lobbying competition and a decline in expected allocative efficiency. Hence we identify a negative side-effect of transparency policy, which also has implications for various other fields such as political campaigning or firm competition.

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Paper provided by University of St. Gallen, School of Economics and Political Science in its series Economics Working Paper Series with number 1128.

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Length: 44 pages
Date of creation: Jul 2011
Date of revision:
Handle: RePEc:usg:econwp:2011:28
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  1. Baye, M.R. & Kovenock, D. & De Varies, C.G., 1990. "The All-Pay Auction With Complete Information," Papers 9051, Tilburg - Center for Economic Research.
  2. Kyung Hwan Baik & Shogren, Jason F., 1995. "Contests with spying," European Journal of Political Economy, Elsevier, vol. 11(3), pages 441-451, September.
  3. Konrad, Kai A. & Leininger, Wolfgang, 2007. "The generalized Stackelberg equilibrium of the all-pay auction with complete information," Munich Reprints in Economics 22092, University of Munich, Department of Economics.
  4. Lambsdorff, Johann Graf, 2002. " Corruption and Rent-Seeking," Public Choice, Springer, vol. 113(1-2), pages 97-125, October.
  5. Morgan, John & Vardy, Felix, 2007. "The value of commitment in contests and tournaments when observation is costly," Games and Economic Behavior, Elsevier, vol. 60(2), pages 326-338, August.
  6. Moldovanu, Benny & Sela, Aner, 1999. "The Optimal Allocation of Prizes in Contests," Sonderforschungsbereich 504 Publications 99-75, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
  7. Nicola Persico, 1997. "Information Acquisition in Auctions," UCLA Economics Working Papers 762, UCLA Department of Economics.
  8. Baye, M.R. & Kovenock, D. & De Vries, C.G., 1991. "Rigging The Lobbying Process: An Application Of The All- Pay Auction," Purdue University Economics Working Papers 1002, Purdue University, Department of Economics.
  9. Mathias Dewatripont & Eric Maskin, 1995. "Contractual contingencies and renegotiation," ULB Institutional Repository 2013/9609, ULB -- Universite Libre de Bruxelles.
  10. Morgan, John, 2003. " Sequential Contests," Public Choice, Springer, vol. 116(1-2), pages 1-18, July.
  11. Kolmar, Martin & Rommeswinkel, Hendrik, 2013. "Contests with group-specific public goods and complementarities in efforts," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 9-22.
  12. Stergios Skaperdas, 1996. "Contest success functions (*)," Economic Theory, Springer, vol. 7(2), pages 283-290.
  13. Potters, Jan & van Winden, Frans, 1992. " Lobbying and Asymmetric Information," Public Choice, Springer, vol. 74(3), pages 269-92, October.
  14. Qiang Fu, 2006. "Endogenous timing of contest with asymmetric information," Public Choice, Springer, vol. 129(1), pages 1-23, October.
  15. Arye L. Hillman & John G. Riley, 1987. "Politically Contestable Rents and Transfers," UCLA Economics Working Papers 452, UCLA Department of Economics.
  16. Barros, Fatima, 1997. "Asymmetric information as a commitment in oligopoly," European Economic Review, Elsevier, vol. 41(2), pages 207-225, February.
  17. Hurley, Terrance M. & Shogren, Jason F., 1998. "Effort levels in a Cournot Nash contest with asymmetric information," Journal of Public Economics, Elsevier, vol. 69(2), pages 195-210, June.
  18. Dixit, Avinash K, 1987. "Strategic Behavior in Contests," American Economic Review, American Economic Association, vol. 77(5), pages 891-98, December.
  19. Paul Milgrom, 2007. "What the Seller Won’t Tell You: Persuasion and Disclosure in Markets," Levine's Bibliography 843644000000000045, UCLA Department of Economics.
  20. In-Koo Cho & David M. Kreps, 1987. "Signaling Games and Stable Equilibria," The Quarterly Journal of Economics, Oxford University Press, vol. 102(2), pages 179-221.
  21. Vives, Xavier, 1984. "Duopoly information equilibrium: Cournot and bertrand," Journal of Economic Theory, Elsevier, vol. 34(1), pages 71-94, October.
  22. repec:oup:restud:v:74:y:2007:i:3:p:705-731 is not listed on IDEAS
  23. Carl Shapiro, 1986. "Exchange of Cost Information in Oligopoly," Review of Economic Studies, Oxford University Press, vol. 53(3), pages 433-446.
  24. Dan Kovenock & Florian Morath & Johannes Münster, 2015. "Information Sharing in Contests," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 24(3), pages 570-596, 09.
  25. Baik, Kyung H & Shogren, Jason F, 1992. "Strategic Behavior in Contests: Comment," American Economic Review, American Economic Association, vol. 82(1), pages 359-62, March.
  26. Vijay Krishna & John Morgan, 1994. "An Analysis of the War of Attrition and the All-Pay Auction," Game Theory and Information 9409002, EconWPA.
  27. Andrew F. Daughety & Jennifer F. Reinganum, 2008. "Communicating quality: a unified model of disclosure and signalling," RAND Journal of Economics, RAND Corporation, vol. 39(4), pages 973-989.
  28. Leininger, Wolfgang, 1993. " More Efficient Rent-Seeking--A Munchhausen Solution," Public Choice, Springer, vol. 75(1), pages 43-62, January.
  29. Nti, Kofi O, 1999. " Rent-Seeking with Asymmetric Valuations," Public Choice, Springer, vol. 98(3-4), pages 415-30, March.
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