A recently published paper by Christian Ewerhart and Julia Lareida provides novel insights into the role of communication in situations of conflict.
Christian Ewerhart and Julia Lareida are exploring in the new study, "Voluntary Disclosure in Asymmetric Contests", the incentives of disclosing information prior to contests where chance or randomness play a role, for example, in a military conflict.
The study shows that when competition is uneven, full disclosure of verifiable information is the only outcome consistent with optimal decision making. The same conclusion is obtained when strategically important information is held by one side only.
In contrast, the exchange of unverifiable information can never affect the outcome of a contest.
The analysis challenges conventional wisdom by extending game theory and underscoring the wide applicability of a robust disclosure principle.
Beyond advancing economic theory, this study holds promise for contributing to the optimal design of real-world contests and to the effective resolution of conflict.
Find out more about the study, "Voluntary Disclosure in Asymmetric Contests", published in the Review of Economic Studies.