Information Disclosure in All-Pay Contests with Costly Entry

19:00-21:00, Saturday, May 9, 2020

Tencent Meeting (Meeting ID: 579 754 559)

Dr. Xin FENG is now an Assistant Professor at department of economics, Nanjing University. She received her Ph.D. in economics from National University of Singapore in 2017. She was anonymous reviewer for Economic Inquiry, Journal of Economic Behavior and Organization, Social Choice and Welfare, among others. Her work has appeared in Journal of Public Economics and Economics Letters. Dr. FENG has received grant from National Natural Science Foundation of China (NSFC) for young Scholars. Her fields of interest are microeconomics, industrial organization theory, mathematical economics and mechanism design (focusing on competition and auction).

In this paper, we accommodate the costly entry of contestants and examine the optimal design of information disclosure in a two-player all-pay contest. The information designer should take into account both ex ante entry incentives and post-entry effort elicitation. We show that full concealment (full disclosure) induces greater expected aggregate effort if entry cost is lower (higher) than a threshold. If random disclosure policies are further considered, we identify the optimal degree of transparency, which increases with entry cost to attract entry. In particular, depending on entry cost, full disclosure, full concealment, and diverse random disclosure policies could all be optimal. Our results indicate that endogenous participation plays a crucial role in the design of information revelation.

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