Information acquisition in conflicts

Abstract

This paper considers incentives for information acquisition ahead of conflicts. We characterize the (unique) equilibrium of the all-pay auction between two players with one-sided asymmetric information. The type of one player is common knowledge. The type of the other player is drawn from a continuous distribution and is private information of this player. We then use our results to study information acquisition prior to an all-pay auction. Depending on the cost of information, only one player may invest in information. If the decision to acquire information is observable for the opponent, but not the information received, one-sided asymmetric information can occur endogenously in equilibrium. Moreover, compared with the first best, information acquisition is excessive. In contrast, with open or covert information acquisition, the cutoff values for equilibrium information acquisition are as in the first best.

Ranking Disclosure Policies in All‐pay Auctions

“…Our paper is also related to the literature on players' incentive to acquire and share information in different auction formats, such as Persico (), Yildirim (), Compte and Jehiel (), Szech (), Morath and Münster (), Denter, Morgan, and D. Sisak (), and Kovenock, Morath, and Münster (). In particular, in contrast to this paper, Denter, Morgan, and Sisak () consider one‐sided asymmetric information in an all pay setting.…”

Alliance Formation in Contests with Incomplete Information

“…Fey (2008) and Wasser (2013) introduce informational asymmetries on the costs of effort provision. In Morath and Münster (2013) players may acquire information on their valuations, and opponents observe whether or not information was acquired but do not learn the information. The central question which is studied in the paper which I offer is in how far agents truthfully reveal their private information in a pre-stage and in which way this influences behavior in the subsequent contest.…”

Volunteering and the strategic value of ignorance

“…If j exhibits a discontinuity at t i , then there is an " > 0 such that i is strictly better o¤ by conceding in t i + " instead of in t i , because this would strictly decrease the expected contribution cost at only an in…nitesimally higher expected waiting cost. 22 Note that j captures both uncertainty of i over j's contribution cost and possible randomization of j.…”

“…22 Consider a concession of i in t i 2 ( c i =2 + T; T ) and suppose that there is a strictly positive probability that i provides the good in t i , i.e. j (t i ) < 1.…”