Information alliances in contests with budget limits
We study the role of information exchange that may occur in alliances in a contest without noise. Contestants learn their own limits of what they can spend in a contest. They may also form alliances and learn the limits of all players who are within the same alliance. Then they decide independently about their own contest efforts. Alliance formation for the purpose of information exchange is beneficial for members of the same alliance and neutral for all other players. Also, a merger between alliances is beneficial for their members. Further, we identify and discuss the set of stable alliance combinations.
KeywordsContest Budget limits Incomplete information Alliances Information sharing
JEL ClassificationD72 D74
Unable to display preview. Download preview PDF.
- Baye, M. R., Kovenock, D., & de Vries, C. G. (1994). The solution to the Tullock rent-seeking game when R>2: mixed-strategy equilibria and mean dissipation rates. Public Choice, 81(3–4), 289–294. Google Scholar
- Baye, M. R., Kovenock, D., & de Vries, C. G. (1996). The all-pay auction with complete information. Economic Theory, 8(2), 291–305. Google Scholar
- Bloch, F. (2009). Endogenous formation of alliances in conflicts. Unpublished manuscript, Ecole Polytechnique, Palaiseau. Google Scholar
- Konrad, K. A., & Kovenock, D. (2009a). The lifeboat problem. CEPR Discussion Papers No. 7424. Google Scholar
- Kovenock, D., Morath, F., & Münster, J. (2009). Information sharing in contests. Unpublished manuscript, WZB Berlin. Google Scholar
- Kovenock, D., & Roberson, B. (2008). Coalitional Colonel Blotto games with application to the economics of alliances. Discussion Paper SP II 2008-02, WZB Berlin. Google Scholar
- Tan, G., & Wang, R. (1997). Endogenous coalition formation in rivalry. QED Working Paper No. 956, 09-1997, Queen’s University. Google Scholar
- Tullock, G. (1980). Efficient rent seeking. In J. Buchanan, R. Tollison, & G. Tullock (Eds.), Towards a theory of the rent-seeking society (pp. 97–112). College Station: Texas A&M University Press. Google Scholar