SMU SOE Online Seminar (Sep 29, 2022, 4pm-5.30pm): Information Disclosure and Favoritism in Contests

Please click here if you are unable to view this page.

TOPIC:

INFORMATION DISCLOSURE AND FAVORITISM IN CONTESTS

ABSTRACT Two contestants compete for a prize. The value of the prize is common and initially unknown to the contestants. A designer has two instruments for the design of the contest: (i) information disclosure, and (ii) favoritism. First, she can conduct an investigation and obtain a noisy signal regarding the value of the prize; she can decide whether to reveal the signal to each contestant. Second, she can bias the competition by favoring one of the contestants. We show that the form of optimal contest depends on the designer's objective. When she maximizes the expected total effort of the contest, the optimal disclosure is always symmetric---such that contestants either are informed or remain uninformed---while biasing the competition when contestants are asymmetric. When the designer maximizes the expected winner's effort, we find that the two instruments exhibit complementarity. The designer may deliberately create information asymmetry by revealing the signal to only one contestant, while releveling the playing field by favoring the other, even if the contestants are symmetric ex ante. Our analysis provides novel insights into the nature of these design instruments. Click here to view the CV.		This seminar will be held virtually via Zoom. A confirmation email with the Zoom details will be sent to the registered email by 28 September 2022.
		PRESENTER Zenan Wu Peking University
		RESEARCH FIELDS Applied Microeconomic Theory Industrial Organization Contest Theory Insurance Markets Behavioral Economics
		DATE: 29 September 2022 (Thursday)
		TIME: 4.00pm - 5.30pm

© Copyright 2024 by Singapore Management University. All Rights Reserved.