31 Pages Posted: 13 Jun 2016
Date Written: January 22, 2015
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: 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