Information and Incentives in A Model of Contest Between Large Groups

This paper studies a model of social contest between two large groups, in which individual agents can choose whether or not to actively support their group. They become active supporters if they expect their group to win with a sufficiently high probability. The identity of the winner is decided according to a deterministic social rule that is a function of the groups’ strengths and activity rates. Agents have imperfect and heterogeneous information, from both public and private sources with known precisions, about the strength of the other group. No modification of the information structure gives an unambiguous advantage to one particular team. The effects of private and public precisions on equilibrium outcomes are always opposed. Increasing the precision of the public information of a group has the same effect as increasing the sensitivity of the social rule to its activity rate, illustrating the idea that public information favors collective action. For a particular example of the social rule, the paper characterizes the information structure that would arise endogenously in two different settings: a disclosure game between group leaders and a contest design.