Learning the Type of the Opponent in Imperfectly Discriminating Contests with Asymmetric Information

16 Pages Posted: 26 Aug 2008  

Ganna Pogrebna

Columbia University

Date Written: June 1, 2008

Abstract

In a competitive environment players often face uncertainty about the relative strength of their opponents. This paper considers a winner-take-all rent-seeking contest between two players with different costs of effort. Costs of effort are private knowledge, however, players have an opportunity to learn the opponent's type by engaging in either private (the opponent does not know about the information acquisition) or public (the opponent knows about the information acquisition) learning. We show that a situation, when one player learns the type of the opponent privately while the opponent abstains from learning cannot be an equilibrium. Yet, there exists an equilibrium, when one player engages in public learning and the other refrains from learning.

Keywords: Imperfectly discriminating contests, asymmetric information

JEL Classification: D72, D82

Suggested Citation

Pogrebna, Ganna, Learning the Type of the Opponent in Imperfectly Discriminating Contests with Asymmetric Information (June 1, 2008). Available at SSRN: https://ssrn.com/abstract=1259329 or http://dx.doi.org/10.2139/ssrn.1259329

Ganna Pogrebna (Contact Author)

Columbia University ( email )

419 Schermerhorn Hall
New York, NY 10027
United States

HOME PAGE: http://www.gannapogrebna.com

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