Activity and inactivity in a rent-seeking contest with private information

Abstract

We consider a rent-seeking contest in which one player has private information about his own valuation of the prize. This valuation may be either high or low. All other players have a known and identical valuation of the prize. We present necessary and sufficient conditions under which the privately informed player exerts a positive or zero equilibrium effort. Copyright Springer Science + Business Media, Inc. 2006

Rent-seeking contests with incomplete information

“…For exam-ple, Harstad (1995) looks at a model with asymmetrically informed agents, but in the context of a winner-take-all game. Hurley and Shogren (1998b) and Schoonbeek and Winkel (2006) both consider models with one-sided incomplete information, while Hurley and Shogren (1998a) and Malueg and Yates (2004) present models with two-sided incomplete information in which both players' valuations are either high or low. Additionally, recent work on existence of equilibria in rent-seeking contests includes Cornes and Hartley (2005) and Malueg and Yates (2006), but these papers assume complete information.…”

Voluntary Disclosure in Unfair Contests

“…denotes the expectation over the realizations of c j 2 C j , with j 6 = i. Following Schoonbeek and Winkel (2006), a type c i 2 C i that chooses an equilibrium e¤ort i (c i ) > 0 ( i (c i ) = 0) will be called active (inactive). The discontinuity of the payo¤ functions at the origin implies that, at any Bayesian equilibrium, both players are necessarily active with positive probability.…”

“…Malueg and Yates (2004) analyzed a symmetric two-player Tullock contest with two equally likely, but possibly correlated types. Schoonbeek and Winkel (2006) pointed out that, in a contest of one-sided incomplete information, individual types may remain inactive. For a large class of probabilistic incomplete-information contests, including those considered in the present paper, Einy et al (2015) established existence of a Bayesian equilibrium, while Ewerhart and Quartieri (under review) proved existence of a unique Bayesian equilibrium.…”

Probabilistic procurement auctions

“…5 The literature has found closed-form solutions only for special cases, mostly standard two-player Tullock contests where one or both players are privately informed about their (discrete) valuation of the prize or their (constant) marginal cost. Examples, among others, are Hurley and Shogren (1998b), Malueg and Yates (2004), and Schoonbeek and Winkel (2006). In Katsenos (2010), players can signal their marginal cost prior to the contest.…”