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|Title:||Information alliances in contests with budget limits |
|Authors:||Konrad, Kai A.|
|Issue Date:||2010 |
|Series/Report no.:||Discussion papers // Wissenschaftszentrum Berlin für Sozialforschung, Schwerpunkt Märkte und Politik: Forschungsprofessur & Projekt The Future of Fiscal Federalism SP II 2010-21|
|Abstract:||We study the role of information exchange through alliances in a framework with contestants who have binding budget limits and know their own budget limit but are incompletely informed about other contestants' budget limits. First, we solve for the Bayesian Nash equilibrium. Then we consider the role of information exchange through alliances. Contestants learn the budget limits of all players who are within the same alliance, and then decide independently about their own contest efforts. This type of alliance formation is beneficial for alliance members and neutral for players who do not belong to the alliance. Also, a merger between alliances is beneficial for their members. Further, we consider merger between alliances and discuss the set of stable combinations of alliances.|
|Document Type:||Working Paper|
|Appears in Collections:||Publikationen von Forscherinnen und Forschern des WZB|
Discussion Papers, Forschungsprofessur & Projekt "The Future of Fiscal Federalism"
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