Information sharing in a contest game with group identity

Abstract

In this paper, we study a private-information contest game with two stages. In stage 1 players simultaneously choose whether to announce their group identity, and in stage 2 each player simultaneously plays a within-group lottery contest and an across-group contest. Players’ information sharing incentives are analyzed and all symmetric equilibria of the game are fully characterized. Our results show that (1) full disclosure by both types is always one of the equilibria; (2) full concealment by both types can be supported as an equilibrium information strategy when the relative magnitude of high and low valuations is large, and when such a relative magnitude is small, there is an equilibrium in which the high type randomizes and the low type fully conceals.