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Information Disclosure in Contests: A Bayesian Persuasion Approach

31 Pages Posted: 13 Jun 2016  

Jun Zhang

University of Technology Sydney

Junjie Zhou

National University of Singapore (NUS), Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: January 22, 2015

Abstract

We examine optimal information disclosure through Bayesian persuasion in a two-player contest. One contestant's valuation is commonly known and the other's is his private information. The contest organiser can precommit to a signal to in uence the uninformed contestant's belief about the informed contestant. We show that to search for the optimal signal when the informed contestant's valuation follows a binary distribution, it is without loss of generality to compare no disclosure with full disclosure; otherwise, such a restriction causes loss of generality. We propose a simple method to compute the optimal signal, which yields explicit solutions in some situations.

Keywords: Bayesian Persuasion, Contests, Information Disclosure

JEL Classification: C72, D72, D82

Suggested Citation

Zhang, Jun and Zhou, Junjie, Information Disclosure in Contests: A Bayesian Persuasion Approach (January 22, 2015). Available at SSRN: https://ssrn.com/abstract=2793655 or http://dx.doi.org/10.2139/ssrn.2793655

Jun Zhang (Contact Author)

University of Technology Sydney ( email )

EDG, School of Business
University of Technology Sydney
Sydney, NSW
Australia

HOME PAGE: http://www.zhangjun.weebly.com

Junjie Zhou

National University of Singapore (NUS), Department of Economics ( email )

Singapore
Singapore

HOME PAGE: http://zhoujunjie.weebly.com/

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