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Information advantage in common-value classic Tullock contests

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URI: https://hdl.handle.net/10016/23939
ISSN: 2340-5031
UXXI: DT/0000001492
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2016-11
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Abstract
We show that in a common-value classic Tullock contests with incomplete information a player's information advantage is rewarded. Interestingly, in two-player contests both players exert the same expected effort. We characterize the equilibrium of two-player contests in which a player has information advantage, and show that this player exerts a larger effort and wins the price with a larger probability the larger is the realized value of the prize, although he wins the prize less frequently than his opponent. In addition, we find that players may exert more effort in a Tullock contest than in an all-pay auction.
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Information advantage, Asymmetric information, Common-value, Tullock contests
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DE - Working Papers. Economics. WE