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Two-Group Contests with Communication Within and Between Groups

In: Equilibrium Theory for Cournot Oligopolies and Related Games

Author

Listed:
  • Federico Quartieri

    (Università degli studi di Napoli Federico II)

  • Ryusuke Shinohara

Abstract

We consider a two-group contest game with weakest-link social composition functions and convex cost functions and prove the existence of a unique group-proof Nash equilibrium. Such a refinement of the Nash equilibrium prescribes the same communication possibilities as those required by a coalition-proof Nash equilibrium—in the precise sense of Bernheim et al. (J Econ Theory 42:1–12, 1987)—only among the contenders of the same group and between the two groups. We show how a fictitious game with “most inefficient fictitious contenders” can be constructed to prove the existence of a unique group-proof Nash equilibrium of the original two-group contest game. An example evidences that cautious arguments on the (twice) differentiability of cost functions must be used in such a construction.

Suggested Citation

  • Federico Quartieri & Ryusuke Shinohara, 2016. "Two-Group Contests with Communication Within and Between Groups," Springer Series in Game Theory, in: Pierre von Mouche & Federico Quartieri (ed.), Equilibrium Theory for Cournot Oligopolies and Related Games, pages 245-268, Springer.
    • Handle: RePEc:spr:spschp:978-3-319-29254-0_15
    DOI: 10.1007/978-3-319-29254-0_15
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    Cited by:

    1. Katsuya Kobayashi, 2019. "Step-by-step group contests with group-specific public-good prizes," Economics of Governance, Springer, vol. 20(2), pages 183-204, June.

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