Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/275663 
Year of Publication: 
2023
Series/Report no.: 
Working Paper No. 279
Version Description: 
Revised version, July 2023
Publisher: 
University of Zurich, Department of Economics, Zurich
Abstract: 
This paper studies the incentives for interim voluntary disclosure of verifiable information in probabilistic all-pay contests with two-sided incomplete information. Private information may concern marginal cost, valuations, and ability. Our main result says that, if the contest is uniformly asymmetric, then full revelation is the unique perfect Bayesian equilibrium outcome. This is so because the weakest type of the underdog reveals her type in an attempt to moderate the favorite while, similarly, the strongest type of the favorite tries to discourage the underdog - so that the contest unravels. This strong-form disclosure principle is robust with respect to correlation, partitional evidence, randomized disclosures, sequential moves, and continuous type spaces. Moreover, the assumption of uniform asymmetry is not needed when incomplete information is one-sided. However, the principle breaks down when contestants are potentially too similar in strength, possess commitment power, or when information is unverifiable. In fact, cheap talk will always be ignored, even if mediated by a trustworthy third party.
Subjects: 
Asymmetric contests
Incomplete information
Disclosure
Strategic complements and substitutes
Dominance and defiance
Cheap talk
JEL: 
C72
D74
D82
J71
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
908.23 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.