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Disclosure policy in Tullock contests with asymmetric stochastic entry

Author

Listed:
  • Qiang Fu
  • Jingfeng Lu
  • Jun Zhang
Abstract
We examine how disclosure policy can be optimally designed to incentivize contestants when their participation is exogenously stochastic. In a generalized Tullock contest setting with two players who are asymmetric in both their values and entry probabilities, we fully characterize the necessary and sufficient conditions under which no disclosure dominates full disclosure. We find that the comparison depends solely on a balance effect exercised by entry probabilities on the expected total effort. The optimal disclosure policy must better balance the competition. These conditions continue to hold when the precision r of Tullock contests is endogenously chosen by the designer.

Suggested Citation

  • Qiang Fu & Jingfeng Lu & Jun Zhang, 2016. "Disclosure policy in Tullock contests with asymmetric stochastic entry," Canadian Journal of Economics, Canadian Economics Association, vol. 49(1), pages 52-75, February.
    • Handle: RePEc:cje:issued:v:49:y:2016:i:1:p:52-75
    DOI: 10.1111/caje.12190
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    Cited by:

    1. Alejandro Melo Ponce, 2018. "The Secret Behind The Tortoise and the Hare: Information Design in Contests," 2018 Papers pme809, Job Market Papers.
    2. Clark, Derek J. & Kundu, Tapas, 2021. "Competitive balance: Information disclosure and discrimination in an asymmetric contest," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 178-198.
    3. Chen, Bo & Jiang, Xiandeng & Knyazev, Dmitriy, 2017. "On disclosure policies in all-pay auctions with stochastic entry," Journal of Mathematical Economics, Elsevier, vol. 70(C), pages 66-73.
    4. Luke Boosey & Philip Brookins & Dmitry Ryvkin, 2020. "Entry in group contests," Working Papers wp2020_02_01, Department of Economics, Florida State University.
    5. Goel, Sumit & Goyal, Amit, 2023. "Optimal tie-breaking rules," Journal of Mathematical Economics, Elsevier, vol. 108(C).
    6. Drugov, Mikhail & Ryvkin, Dmitry, 2017. "Winner-Take-All Tournaments," CEPR Discussion Papers 12067, C.E.P.R. Discussion Papers.
    7. Bo Chen & Marco Serena, 2020. "Bid Caps and Disclosure Policies," Working Papers tax-mpg-rps-2020-08, Max Planck Institute for Tax Law and Public Finance.
    8. Chen, Bo & Ma, Lijun & Zhu, Zhaobo & Zhou, Yu, 2020. "Disclosure policies in all-pay auctions with bid caps and stochastic entry," Economics Letters, Elsevier, vol. 186(C).
    9. Chen, Bo, 2020. "Disclosure policies in research contests with stochastic entry," Economics Letters, Elsevier, vol. 191(C).
    10. Chen, Zhuoqiong, 2021. "Optimal information exchange in contests," Journal of Mathematical Economics, Elsevier, vol. 96(C).
    11. Feng, Xin & Lu, Jingfeng, 2017. "Uniqueness of equilibrium in two-player asymmetric Tullock contests with intermediate discriminatory power," Economics Letters, Elsevier, vol. 159(C), pages 61-64.
    12. Dmitry Ryvkin & Mikhail Drugov, 2017. "Tournaments," Working Papers wp2017_03_02, Department of Economics, Florida State University.
    13. Chen, Bo & Serena, Marco, 2023. "Disclosure Policies in All-Pay Auctions with Bid Caps," Journal of Economic Behavior & Organization, Elsevier, vol. 209(C), pages 141-160.
    14. Christian Ewerhart & Julia Lareida, 2018. "Voluntary disclosure in asymmetric contests," ECON - Working Papers 279, Department of Economics - University of Zurich, revised Jul 2023.
    15. Jiao, Qian & Ke, Changxia & Liu, Yang, 2022. "When to disclose the number of contestants: Theory and experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 193(C), pages 146-160.
    16. Bo Chen & Emilios Galariotis & Lijun Ma & Zijia Wang & Zhaobo Zhu, 2023. "On disclosure of participation in innovation contests: a dominance result," Annals of Operations Research, Springer, vol. 328(2), pages 1615-1629, September.

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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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