Information acquisition in a war of attrition

Abstract

We consider a war of attrition in which the winner is determined according to the unobservable state of nature on a stochastic deadline and players can acquire information about the state at any time during the game. We study how the players' incentive to acquire information interacts with the verifiability of the acquired information. When the information is verifiable, players only have an incentive to free ride on the opponent's information acquisition and, thus, there is excessive delay. When the information is unverifiable, an informed player obtains information rents. This provides an incentive for players to acquire information more quickly, thereby reducing delay. However, an uninformed player catches up on information acquisition so as not to be exploited by the informed player, which creates redundant duplication in information acquisition. We show that in the most natural class of equilibria the two effects cancel each other out and, thus, the players' payoffs are identical, regardless of whether information is verifiable. We also show that, in our model, the faster the deadline arrives, the longer the conflict lasts.