Asymmetric information contests

Terrance M. Hurley, Jason F. Shogren

Research output: Contribution to journalArticlepeer-review

49 Scopus citations

Abstract

We consider how asymmetries in information affect contest behavior. We find two effects drive behavior-risk and perceptions of an opponent's value. Our results also suggest that the more tractable one-sided asymmetric information contest might be sufficient to capture contest behavior under uncertainty. However, the efficiency of a contest is sensitive to asymmetric information and the distribution a players' values because players with relatively low values can have an increased probability of success. Thus, it is important (a) to account for information asymmetries to avoid biasing predicted efficiency, and (b) to recognize that this bias is unsystematic.

Original languageEnglish (US)
Pages (from-to)645-665
Number of pages21
JournalEuropean Journal of Political Economy
Volume14
Issue number4
DOIs
StatePublished - Nov 1998

Keywords

  • Asymmetric information
  • Contests
  • D72
  • D74
  • Rent-seeking
  • Risk

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