Information Sharing in Contests

27 Pages Posted: 29 Jul 2015

See all articles by Dan Kovenock

Dan Kovenock

Chapman University - Economic Science Institute; CESifo (Center for Economic Studies and Ifo Institute)

Florian Morath

Department of Public Finance, University of Innsbruck; Max Planck Institute for Tax Law and Public Finance

Johannes Munster

University of Cologne

Date Written: Fall 2015

Abstract

We study the incentives to share private information ahead of contests, such as markets with promotional competition, procurement contests, or research and development (R&D). We consider the cases where firms have (i) independent values and (ii) common values of winning the contest. In both cases, when decisions to share information are made independently, sharing information is strictly dominated. With independent values, an industry‐wide agreement to share information can arise in equilibrium. Expected effort is lower with than without information sharing. With common values, an industry‐wide agreement to share information never arises in equilibrium. Expected effort is higher with than without information sharing.

Suggested Citation

Kovenock, Daniel and Morath, Florian and Munster, Johannes, Information Sharing in Contests (Fall 2015). Journal of Economics & Management Strategy, Vol. 24, Issue 3, pp. 570-596, 2015, Available at SSRN: https://ssrn.com/abstract=2637082 or http://dx.doi.org/10.1111/jems.12105

Daniel Kovenock (Contact Author)

Chapman University - Economic Science Institute ( email )

One University Dr.
Orange, CA 92866
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Florian Morath

Department of Public Finance, University of Innsbruck ( email )

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

Johannes Munster

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

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