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The Generalized War of Attrition

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  • Paul Klemperer

    (Oxford University)

  • Jeremy Bulow

    (Stanford University)

Abstract

[Forthcoming, American Economic Review.] We model a War of Attrition with N+K firms competing for N prizes. If firms must pay their full costs until the whole game ends, even after dropping out themselves (as in a standard-setting context), each firm's exit time is independent both of K and of other players' actions. If, instead, firms pay no costs after dropping out (as in a natural oligopoly), the field is immediately reduced to N+1 firms. Furthermore, in this limit it is always the K-1 lowest-value firms who drop out in zero time, even though each firm's value is private information to itself.

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Bibliographic Info

Paper provided by EconWPA in its series Game Theory and Information with number 9901004.

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Length: 24 pages
Date of creation: 28 Jan 1999
Date of revision:
Handle: RePEc:wpa:wuwpga:9901004

Note: Type of Document - pdf; prepared on IBM PC ; to print on HPLaserjet4mplus/PostScript; pages: 24 ; figures: none. We never published this piece and now we would like to reduce our mailing and xerox cost by posting it.
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Related research

Keywords: War of Attrition Auctions Standards Natural Monopoly Oligopoly Twoness Strategic Independence;

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References

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  1. Baye, M.R. & Kovenock, D. & De Vries, C., 1992. "The All-Pay Auction with Complete Information," Papers 8-92-1, Pennsylvania State - Department of Economics.
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