Universität zu Köln

Fu, Qiang ORCID: 0000-0003-0381-781X, Guertler, Oliver and Muenster, Johannes (2013). Communication and commitment in contests. J. Econ. Behav. Organ., 95. S. 1 - 20. AMSTERDAM: ELSEVIER. ISSN 1879-1751

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Abstract

Players often engage in high-profile public communications to demonstrate their confidence in winning before they carry out actual competitive activities. We investigate players' incentives to engage in such pre-contest communication. Our key assumption is that a player suffers a cost when he sends a message of confidence but later loses the contest. Sending a message thus increases one's incentive to win. For the favorite, this has the beneficial strategic effect of decreasing the underdog's equilibrium effort. In a standard Tullock contest model, however, with no costs of entry and complete information, this strategic advantage is not strong enough to outweigh the cost of sending the message. Therefore, communication can only be beneficial if it deters the rival's entry into the contest, and under asymmetric information. (C) 2013 Elsevier B.V. All rights reserved.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Fu, Qiang UNSPECIFIED orcid.org/0000-0003-0381-781X UNSPECIFIED Guertler, Oliver UNSPECIFIED UNSPECIFIED UNSPECIFIED Muenster, Johannes UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-472426
DOI:	10.1016/j.jebo.2013.08.011
Journal or Publication Title:	J. Econ. Behav. Organ.
Volume:	95
Page Range:	S. 1 - 20
Date:	2013
Publisher:	ELSEVIER
Place of Publication:	AMSTERDAM
ISSN:	1879-1751
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language STRATEGIC BEHAVIOR; INFORMATION; TOURNAMENTS; REPUTATION; FEEDBACK; ENTRY Multiple languages Economics Multiple languages
URI:	http://kups.ub.uni-koeln.de/id/eprint/47242