The Value of Public Information in Common-Value Tullock Contests
Speaker
Ezra Einy
Date
21/05/2014 - 12:00 - 10:00Add To Calendar
2014-05-21 10:00:00
2014-05-21 12:00:00
The Value of Public Information in Common-Value Tullock Contests
Abstract: We study how changes in the information available to the players of a symmetric common-value Tullock contest with incomplete information affect their payoffs and their incentives to exert effort. For the class of contests where players’ state dependent cost of effort is multiplicative, we show that if the players’ Arrow-Pratt measure of relative risk aversion is increasing (decreasing), then the value of public information is positive (negative). Moreover, if players’ cost of effort (value) is state independent, then players’ effort decreases (increases) with the level of information.
Keywords: Tullock Contests, Common-Values, Value of Public Information.
JEL Classi
cation: C72, D44, D82.
אוניברסיטת בר-אילן - Department of Economics
Economics.Dept@mail.biu.ac.il
Asia/Jerusalem
public
Affiliation
Ben Gurion University
Abstract
Abstract: We study how changes in the information available to the players of a symmetric common-value Tullock contest with incomplete information affect their payoffs and their incentives to exert effort. For the class of contests where players’ state dependent cost of effort is multiplicative, we show that if the players’ Arrow-Pratt measure of relative risk aversion is increasing (decreasing), then the value of public information is positive (negative). Moreover, if players’ cost of effort (value) is state independent, then players’ effort decreases (increases) with the level of information.
Keywords: Tullock Contests, Common-Values, Value of Public Information.
JEL Classi cation: C72, D44, D82.
Attached file
Last Updated Date : 23/04/2014