Population uncertainty and revealing contestants

Bara Kim; Seung Han Yoo

doi:10.1016/j.econlet.2021.109727

Population uncertainty and revealing contestants

Bara Kim, Seung Han Yoo

Department of Economics

Research output: Contribution to journal › Article › peer-review

Abstract

A number of contestants randomly arrives according to a Poisson distribution. Under population uncertainty, a contest designer considers whether or not to reveal the number of players to bidders. We show that for the expected revenue, the two policies are equivalent, but for the expected winner's payment, the revealing policy dominates if the expected number of bidders is sufficiently large, whereas the concealing policy dominates if it is low.

Original language	English
Article number	109727
Journal	Economics Letters
Volume	199
DOIs	https://doi.org/10.1016/j.econlet.2021.109727
Publication status	Published - 2021 Feb

Keywords

Contest
Environmental equivalence
Population uncertainty

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/j.econlet.2021.109727

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title = "Population uncertainty and revealing contestants",

abstract = "A number of contestants randomly arrives according to a Poisson distribution. Under population uncertainty, a contest designer considers whether or not to reveal the number of players to bidders. We show that for the expected revenue, the two policies are equivalent, but for the expected winner's payment, the revealing policy dominates if the expected number of bidders is sufficiently large, whereas the concealing policy dominates if it is low.",

keywords = "Contest, Environmental equivalence, Population uncertainty",

author = "Bara Kim and Yoo, {Seung Han}",

note = "Funding Information: Kim{\textquoteright}s research was supported by the National Research Foundation of Korea (NRF) grant funded by the Korea government (MSIT) (No. 2020R1A2B5B01001864 ). Yoo acknowledges financial support from a Korea University research grant. ",

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N2 - A number of contestants randomly arrives according to a Poisson distribution. Under population uncertainty, a contest designer considers whether or not to reveal the number of players to bidders. We show that for the expected revenue, the two policies are equivalent, but for the expected winner's payment, the revealing policy dominates if the expected number of bidders is sufficiently large, whereas the concealing policy dominates if it is low.

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KW - Population uncertainty

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