scholarly journals Information Acquisition in a War of Attrition

2014 ◽  
Vol 6 (2) ◽  
pp. 37-78 ◽  
Author(s):  
Kyungmin Kim ◽  
Frances Zhiyun Xu Lee
Keyword(s):  
Acquisition Cost ◽  
Information Acquisition ◽  
Symmetric Equilibrium ◽  
War Of Attrition ◽  
Expected Payoffs

We consider a war of attrition where the players can learn about a state that determines their payoffs at stochastic deadline. We study how the incentives to acquire information depend on the (un) verifiability of information and its implications for efficiency. Unverifiability creates distortions (strategic delay in concession or duplication in information acquisition), but encourages information acquisition. In our model, provided that the information acquisition cost is small, these two effects cancel each other out and the players' expected payoffs in symmetric equilibrium are identical whether information is verifiable or not. We also show that shortening deadlines may prolong the conflict. (JEL C72, D82, D83)

Orchestrating Information Acquisition

2021 ◽  
Vol 13 (4) ◽  
pp. 420-465
Author(s):  
Jingfeng Lu ◽  
Lixin Ye ◽  
Xin Feng
Keyword(s):  
Acquisition Cost ◽  
Information Acquisition ◽  
Second Stage ◽  
Private Values

We study how to orchestrate information acquisition in an environment where bidders endowed with original estimates (“types”) about their private values can acquire further information by incurring a cost. We consider both single-round and fully sequential short-listing rules. The optimal single-round shortlisting rule admits the set of most efficient bidders that maximizes expected virtual surplus adjusted by the second-stage signal and information acquisition cost. When shortlisting is fully sequential, at each round, the most efficient remaining bidder is admitted provided that her conditional expected contribution to the virtual surplus is positive. (JEL D44, D82, D83)

An optimal sequential information acquisition model subject to a heuristic assimilation constraint

2016 ◽  
Vol 23 (4) ◽  
pp. 937-982 ◽  
Author(s):  
Debora Di Caprio ◽  
Francisco J. Santos-Arteaga ◽  
Madjid Tavana
Keyword(s):  
Information Acquisition ◽  
Design Methodology ◽  
Analytical Framework ◽  
Content Type ◽  
Programming Techniques ◽  
Acquisition Strategy ◽  
Sequential Information ◽  
Expected Payoffs ◽  
Model Subject ◽  
Sequential Information Acquisition

Purpose – The purpose of this paper is to study the optimal sequential information acquisition process of a rational decision maker (DM) when allowed to acquire n pieces of information from a set of bi-dimensional products whose characteristics vary in a continuum set. Design/methodology/approach – The authors incorporate a heuristic mechanism that makes the n-observation scenario faced by a DM tractable. This heuristic allows the DM to assimilate substantial amounts of information and define an acquisition strategy within a coherent analytical framework. Numerical simulations are introduced to illustrate the main results obtained. Findings – The information acquisition behavior modeled in this paper corresponds to that of a perfectly rational DM, i.e. endowed with complete and transitive preferences, whose objective is to choose optimally among the products available subject to a heuristic assimilation constraint. The current paper opens the way for additional research on heuristic information acquisition and choice processes when considered from a satisficing perspective that accounts for cognitive limits in the information processing capacities of DMs. Originality/value – The proposed information acquisition algorithm does not allow for the use of standard dynamic programming techniques. That is, after each observation is gathered, a rational DM must modify his information acquisition strategy and recalculate his or her expected payoffs in terms of the observations already acquired and the information still to be gathered.

scholarly journals Divide and Inform: Rationing Information to Facilitate Persuasion

2017 ◽  
Vol 92 (5) ◽  
pp. 167-199 ◽  
Author(s):  
Beatrice Michaeli
Keyword(s):  
Acquisition Cost ◽  
Information Acquisition ◽  
Common Belief ◽  
Access To Information ◽  
Precise Information ◽  
Delayed Choice ◽  
Aggregate Information ◽  
Unrestricted Access ◽  
The Common ◽  
To Receive

ABSTRACT This paper develops a Bayesian persuasion model that examines a manager's incentives to gather information when the manager can disseminate this information selectively to interested parties (“users”) and when the objectives of the manager and the users are not perfectly aligned. The model predicts that if the manager can choose the subset of users to receive the information, then the manager may gather more precise information. The paper identifies conditions under which a regime that allows managers to grant access to information selectively maximizes aggregate information. Strikingly, this happens when the objectives of managers and users are sufficiently misaligned. This finding is robust to variations of the model, such as information acquisition cost, unobservable precision, sequential noisy actions taken by the users, and delayed choice of the subset of users in “the know.” These results call into doubt the common belief that forcing managers to provide unrestricted access to information to all potential users is always beneficial.

Wars of Attrition with Endogenously Determined Budget Constraints

2018 ◽  
Vol 18 (2) ◽  
Author(s):  
Joshua Foster
Keyword(s):  
Standard Model ◽  
Mixed Strategy ◽  
Convex Combination ◽  
Investment Decisions ◽  
Budget Constraints ◽  
Symmetric Equilibrium ◽  
War Of Attrition ◽  
Equilibrium Strategies ◽  
The Standard Model

Abstract This paper models a war of attrition where participants first choose contest investment levels that act as a constraint for how long they can compete. To include a measure of the resource’s transferability to other uses (e.g. other contests), expenditures are a convex combination of investment decisions and their ‘bid’ in the contest. It is shown in the symmetric equilibrium that participants use a mixed strategy for their resource investments and plan to exhaust those resources in the contest. Implications of an investment constraint on equilibrium strategies in a structured, tournament-style sequence of contests are also explored, where it is shown that increasing the number of contests in the tournament does not necessarily increase participants’ investments in expectation. These modifications to the standard model allow for important insights into a variety of pre-calculated and budgeted all-pay contests.

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