Economic Theory

, Volume 63, Issue 4, pp 925–942

The value of public information in common-value Tullock contests

Research Article

DOI: 10.1007/s00199-016-0974-3

Cite this article as:
Einy, E., Moreno, D. & Shitovitz, B. Econ Theory (2017) 63: 925. doi:10.1007/s00199-016-0974-3
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Abstract

Consider a symmetric common-value Tullock contest with incomplete information in which the players’ cost of effort is the product of a random variable and a deterministic real function of effort, d. We show that the Arrow–Pratt curvature of d\(R_{d},\) determines the effect on equilibrium efforts and payoffs of the increased flexibility/reduced commitment that more information introduces into the contest: If \(R_{d}\) is increasing, then effort decreases (increases) with the level of information when the cost of effort (value) is independent of the state of nature. Moreover, if \(R_{d}\) is increasing (decreasing), then the value of public information is nonnegative (nonpositive).

Keywords

Tullock contests Common values Value of public information 

JEL Classfication

C72 D44 D82 

Funding information

Funder NameGrant NumberFunding Note
Ministerio Economía y Competitividad (Spain)
  • ECO2014-55953-P and MDM2014-0431
Comunidad de Madrid
  • S2015/HUM-3444
Israel Science Foundation
  • 648/13

Copyright information

© Springer-Verlag Berlin Heidelberg 2016

Authors and Affiliations

  1. 1.Department of EconomicsBen-Gurion University of the NegevBeershebaIsrael
  2. 2.Departamento de EconomíaUniversidad Carlos III de MadridMadridSpain
  3. 3.Department of EconomicsUniversity of HaifaHaifaIsrael

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