Fighting for Lemons: The Balancing Effect of Private Information on Incentives in Dynamic Contests

• 成果类型: Article
• 署名作者: Moeller, Marc; Beccuti, Juan
• 署名单位: University of Bern
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1093/ej/ueaf005
• 发表日期: 2025
• 页码: 1641-1676
• 关键词: common-value auctions; all-pay auction; rent-seeking; strategic experimentation; development competition; performance feedback; tournaments; disclosure; uncertainty; preemption

摘要

In a common-value environment with multi-stage competition, losing a stage conveys positive news about a rival's estimation of a contested prize, capable of balancing the discouraging effect of falling behind. We show that, due to players' learning from stage outcomes, aggregate incentives under private information are often greater than under public information and may even exceed the static competition benchmark. Moreover, laggards can become more motivated than leaders, giving rise to long-lasting fights. Our results have implications for the duration of R&D races, the desirability of feedback in labour and procurement contests, and the campaign spending and selective efficiency of presidential primaries.