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ENDOGENOUS STRENGTH ASYMMETRY and SIGNALLING in SEQUENTIAL CONTESTS
Yohan Pelosse 
Swansea University Author:
Yohan Pelosse
Abstract
This article investigates a two-player sequential contests where the incumbentchooses not only her effort, but also privately determines the impacts of effortsaffecting whether she will be the (strong/weak) ’favourite’ or ’underdog’ (’types’).In this setting, we study the incumbent’s endogenous sign...
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| URI: | https://cronfa.swan.ac.uk/Record/cronfa71995 |
| Abstract: |
This article investigates a two-player sequential contests where the incumbentchooses not only her effort, but also privately determines the impacts of effortsaffecting whether she will be the (strong/weak) ’favourite’ or ’underdog’ (’types’).In this setting, we study the incumbent’s endogenous signalling strategy throughBayesian persuasion and effort strategy. In our main results, we identify a largeclass of contests where the incumbent’s equilibrium behavior is to randomize overthe players’ relative strengths and commit to a signaling policy through which sherenders the challenger uncertain of his own actual type. We prove the existence ofpartially revealing equilibria where the incumbent achieves some payoffs higherthan in any equilibria of the benchmark sequential contest by persuading thechallenger to follow her messages. |
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| College: |
Faculty of Humanities and Social Sciences |
| Funders: |
NONE |