Continuing Wars of Attrition
نویسنده
چکیده
Asymmetries in the abilities of contestants that engage in a protracted competition appear to be more common than symmetric competitions. Why doesn’t the weaker player concede immediately? This paper introduces a model based on the idea that a “war” can only be won by winning a series of battles. There are two kinds of stationary equilibria, one with fighting to completion, the other with a cessation of hostilities. As a player gets closer to losing, that player’s probability of winning battles falls, social welfare rises, and the levels of effort of both players rise. The theory is applied to a variety of conflicts, including wars and attempts at market domination. ∗Economics Discipline, H04 Merewether Building, University of Sydney NSW 2006, AUSTRALIA. This work began during my visit to HSS, Caltech in Fall 2005. I am grateful for their hospitality. I acknowledge financial support from Australian Research Council under DP0210019. †100 Baxter Hall, Caltech, Pasadena, CA 91122, U.S.A.
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Continuing Wars of Attrition
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