General signaling results in dynamic Tullock contests have been missing for long. The reason is the tractability of the problems. In this paper,
an uninformed contestant with valuation vx competes against an informed
opponent with valuation, either high vh or low vl. We show that; (i) When
the hierarchy of valuations is vh ≥ vx ≥ vl, there is no pooling. Sandbagging is too costly for the high type. (ii) When the order of valuations is
vx ≥ vh ≥ vl, there is no separation if vh and vl are close. Sandbagging
is cheap due to the proximity of valuations. However, if vh and vx are
close, there is no pooling. First period cost of pooling is high. (iii) For
valuations satisfying vh ≥ vl ≥ vx, there is no separation if vh and vl
are close. Bluffing in the first period is cheap for the low valuation type.
Conversely, if vx and vl are close there is no pooling. Bluffing in the first
stage is too costly.
JEL: C72, C73, D44, D82.
KEYWORDS: Signaling, Dynamic Contests, Non-existence, Sandbag
Pooling, Bluff Pooling, Separating |