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Contribution Details

Type Working Paper
Scope Discipline-based scholarship
Title Unique equilibrium in contests with incomplete information
Organization Unit
  • Christian Ewerhart
  • Federico Quartieri
  • English
Institution University of Zurich
Series Name Working paper series / Department of Economics
Number 133
ISSN 1664-7041
Number of Pages 41
Date 2018
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.
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Keywords Imperfectly discriminating contests, private information, existence and uniqueness of equilibrium, budget constraints, rent dissipation, Nash-Gleichgewicht, Vollkommene Information, Unvollkommene Information, Entscheidung bei Unsicherheit, Wettbewerb, Gewinnspiel, Spieltheorie, Information, Bewertung, Nash-Gleichgewicht
Additional Information Revised version ; former title: "Unique equilibrium in incomplete information contests with budget constraints"