Social welfare in search games with asymmetric information

Gilad Bavly; Yuval Heller; Amnon Schreiber

doi:10.1016/j.jet.2022.105462

Social welfare in search games with asymmetric information

Gilad Bavly, Yuval Heller, Amnon Schreiber

Department of Economics

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

Abstract

We consider games in which players search for a hidden prize, and they have asymmetric information about the prize's location. We study the social payoff in equilibria of these games. We present sufficient conditions for the existence of an equilibrium that yields the first-best payoff (i.e., the highest social payoff under any strategy profile), and we characterize the first-best payoff. The results have interesting implications for innovation contests and R&D races.

Original language	English
Article number	105462
Journal	Journal of Economic Theory
Volume	202
DOIs	https://doi.org/10.1016/j.jet.2022.105462
State	Published - Jun 2022

Bibliographical note

Funding Information:
This manuscript replaces an obsolete working paper titled ?The social payoff in differentiation games.? We thank Sergiu Hart, Igor Letina, Igal Milchtaich, Abraham Neyman, Ron Peretz, Alon Raviv, Dov Samet, and Eilon Solan, the editor Tilman B?rgers and two anonymous referees for various helpful comments. Bavly and Heller are grateful to the European Research Council for its financial support (ERC starting grant #677057). Bavly acknowledges support from the Department of Economics and the Sir Isaac Wolfson Chair at Bar-Ilan University, and ISF grant 1626/18 and 2566/20. Schreiber acknowledges support from ISF grant 2897/20.

Funding Information:
This manuscript replaces an obsolete working paper titled “The social payoff in differentiation games.” We thank Sergiu Hart, Igor Letina, Igal Milchtaich, Abraham Neyman, Ron Peretz, Alon Raviv, Dov Samet, and Eilon Solan, the editor Tilman Börgers and two anonymous referees for various helpful comments. Bavly and Heller are grateful to the European Research Council for its financial support (ERC starting grant # 677057 ). Bavly acknowledges support from the Department of Economics and the Sir Isaac Wolfson Chair at Bar-Ilan University , and ISF grant 1626/18 and 2566/20 . Schreiber acknowledges support from ISF grant 2897/20 .

Publisher Copyright:
© 2022 Elsevier Inc.

Keywords

Decentralized research
Incomplete information
Search duplication
Social welfare

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10.1016/j.jet.2022.105462

Cite this

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Social welfare in search games with asymmetric information

Abstract

Bibliographical note

Keywords

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