The value of public information in common-value Hillock contests

摘要

Consider a symmetric common-value Tullock contest with incomplete information in which the players' cost of effort is the product of a random variable and a deterministic real function of effort, d. We show that the Arrow-Pratt curvature of d, Rd, determines the effect on equilibrium efforts and payoffs of the increased flexibility/reduced commitment that more information introduces into the contest: If Rd is increasing, then effort decreases (increases) with the level of information when the cost of effort (value) is independent of the state of nature. Moreover, if Rd is increasing (decreasing), then the value of public information is nonnegative (nonpositive).