Disclosure Policies in All-pay Auctions with Affiliated Abilities

This paper investigates whether a contest organizer should disclose private information about bidders' abilities in an all-pay auction. Bidders' abilities are affiliated through an underlying state of the world and are accessible by the contest organizer. The organizer decides whether to disclose this information publicly. I find that the revenue ranking between full concealment and full revealing depends on the affiliation of bidders' abilities and the number of bidders. Full concealment renders a higher expected revenue if bidders' abilities are not too much affiliated or if there are two bidders. If the affiliation is too significant and there are more than two bidders, the revenue ranking between the two disclosure policies can hold in either direction. In particular, if the difference between low-ability and high-ability is not too much different and if either the chance to be of low-ability is sufficiently small in any state of the world or the number of bidders is sufficiently large, full disclosure dominates full concealment in terms of expected revenue. However, bidders strictly prefer full disclosure unless the states of the world are equivalent.