Information Acquisition in a War of Attrition

Abstract

We consider a war of attrition with stochastic deadlines in which the players can learn about the state that determines their payoffs at deadline. We study how the players' incentives to acquire information depend on the (un)verifiability of information and what implications these incentives have for efficiency in information acquisition. We show that unverifiability creates distortions (strategic delay or information duplication) after a player's information acquisition, but encourages the players' information acquisition (less delay in information acquisition). We demonstrate that in our model, these two effects cancel each other out and, therefore, the players' expected payoffs in symmetric equilibrium are identical whether information is verifiable or not. We also show that shortening deadlines may prolong the conflict.

Keywords: Information Acquisition, War of Attrition, Verifiability of Information

JEL Classification: C78, D82, D83