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Instant Exit from the Asymmetric War of Attrition

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Author Info
David P. Myatt

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Abstract

In an asymmetric war of attrition the players` prize valuations are drawn from different distributions. A "stochastic strength" ordering, based upon relative hazard rates, is used to rank these distributions. The stochastically stronger player is perceived to be strong ex ante, even though her realized valuation may be lower ex post. Since the classic war of attrition exhibits multiple equilibria, the game is perturbed; for instance, by imposing an arbitrarily large time limit, or allowing for the arbitrarily small probability of players that are restricted to fighting forever. In the unique equilibrium of the perturbed game, a stochastically weaker player almost always "instantly exits" at the beginning, even though her valuation may be higher.

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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 160.

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Date of creation: 2005
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Handle: RePEc:oxf:wpaper:160

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Keywords: war of attrition exit rent seeking auctions stochastic dominance games of timing bargaining voluntary provision of public goods macroeconomics stabilization adoption of technological standards

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Find related papers by JEL classification:
D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization
L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. David P. Myatt & Chris Wallace, 2006. "When An Evolutionary Analysis of the Volunteer`s Dilemma," Economics Series Working Papers 270, University of Oxford, Department of Economics. [Downloadable!]
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