Optimal information disclosure in contests with communication

Theory and Decision. 2025.

Antsygina A.

We study optimal information disclosure in static contests where contestants are initially uninformed about their values of winning but can learn them, publicly or privately, from a designer. The designer, who maximizes total effort, chooses a disclosure policy and commits to it before observing the realized value profile. A key feature of our model is that contestants who receive private information can subsequently communicate by exchanging truthful messages. We show that contestants share their private information if and only if their values of winning are positively correlated. However, such communication often induces an asymmetric contest, thereby reducing total effort. Consequently, the designer strictly prefers to conceal all information to keep the competition even. This result is in stark contrast to the no communication benchmark, where private disclosure is optimal under positive correlation. Our findings are robust to player-specific disclosure rules and sufficiently small information acquisition costs.

Keywords: communication, information disclosure, contest, all-pay auction