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Contribution Details

Type Journal Article
Scope Discipline-based scholarship
Title Unique equilibrium in contests with incomplete information
Organization Unit
Authors
  • Christian Ewerhart
  • Federico Quartieri
Item Subtype Original Work
Refereed Yes
Status Published in final form
Language
  • English
Journal Title Economic Theory
Publisher Springer
Geographical Reach international
ISSN 0938-2259
Volume 70
Number 1
Page Range 243 - 271
Date 2020
Abstract Text Considered are imperfectly discriminating contests in which players may possess private information about the primitives of the game, such as the contest technology, valuations of the prize, cost functions, and budget constraints. We find general conditions under which a given contest of incomplete information admits a unique pure-strategy Nash equilibrium. In particular, provided that all players have positive budgets in all states of the world, existence requires only the usual concavity and convexity assumptions. Information structures that satisfy our conditions for uniqueness include independent private valuations, correlated private values, pure common values, and examples of interdependent valuations. The results allow dealing with inactive types, asymmetric equilibria, population uncertainty, and the possibility of resale. It is also shown that any player that is active with positive probability ends up with a positive net rent.
Digital Object Identifier 10.1007/s00199-019-01209-4
Other Identification Number merlin-id:18362
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Keywords Imperfectly discriminating contests, private information, existence and uniqueness of equilibrium, budget constraints, rent dissipation