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Information acquisition in conflicts
[Informationsbeschaffung in Konflikten]

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  • Morath, Florian
  • Münster, Johannes

Abstract

This paper considers incentives for information acquisition ahead of conflicts. We characterize the (unique) equilibrium of the all-pay auction between two players with one-sided asymmetric information. The type of one player is common knowledge. The type of the other player is drawn from a continuous distribution and is private information of this player. We then use our results to study information acquisition prior to an all-pay auction. Depending on the cost of information, only one player may invest in information. If the decision to acquire information is observable for the opponent, but not the information received, one-sided asymmetric information can occur endogenously in equilibrium. Moreover, compared with the first best, information acquisition is excessive. In contrast, with open or covert information acquisition, the cut-off values for equilibrium information acquisition are as in the first best.

Suggested Citation

  • Morath, Florian & Münster, Johannes, 2009. "Information acquisition in conflicts
    [Informationsbeschaffung in Konflikten]
    ," Discussion Papers, Research Unit: Market Processes and Governance SP II 2009-10, Social Science Research Center Berlin (WZB).
  • Handle: RePEc:zbw:wzbmpg:spii200910
    as

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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Häfner, Samuel, 2017. "A tug-of-war team contest," Games and Economic Behavior, Elsevier, vol. 104(C), pages 372-391.
    2. Cédric Wasser, 2013. "Incomplete information in rent-seeking contests," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 53(1), pages 239-268, May.
    3. Bilancini, Ennio & Boncinelli, Leonardo, 2018. "Signaling with costly acquisition of signals," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 141-150.
    4. Qiang Fu & Jingfeng Lu & Yue Pan, 2015. "Team Contests with Multiple Pairwise Battles," American Economic Review, American Economic Association, vol. 105(7), pages 2120-2140, July.
    5. repec:spr:joecth:v:63:y:2017:i:4:d:10.1007_s00199-016-0974-3 is not listed on IDEAS
    6. Tri Vi Dang & Florian Morath, 2013. "The Taxation of Bilateral Trade with Endogenous Information," Working Papers tax-mpg-rps-2013-07, Max Planck Institute for Tax Law and Public Finance.
    7. repec:zbw:rwirep:0544 is not listed on IDEAS
    8. Lars P. Metzger, 2015. "Alliance Formation in Contests with Incomplete Information," Ruhr Economic Papers 0544, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    9. Metzger, Lars P., 2015. "Alliance Formation in Contests with Incomplete Information," Ruhr Economic Papers 544, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    10. Seel, Christian, 2014. "The value of information in asymmetric all-pay auctions," Games and Economic Behavior, Elsevier, vol. 86(C), pages 330-338.
    11. 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.

    More about this item

    Keywords

    All-pay auctions; conflicts; contests; information acquisition; asymmetric information;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • 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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