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Strategic Behavior in Contests: Comment


  • Baik, Kyung H
  • Shogren, Jason F


Almost by definition, contests involve strategy. This is especially true in contests between unevenly matched contenders. In a recent article, (1987) explored strategic commitment in contests between a favorite and an underdog. The favorite is defined as the player whose chance of victory exceeds one-half at the Nash equilibrium; an underdog ’s chance is less than one-half. Dixit concludes that, if the favorite has the opportunity to move first, then he will overcommit effort compared with the Nash equilibrium. An important implication of the favorite overcommitting effort is that strategic behavior leads to greater social costs (see Gordon Tullock, 1980). The opposite holds if the underdog has the opportunity to move first.
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Suggested Citation

  • Baik, Kyung H & Shogren, Jason F, 1992. "Strategic Behavior in Contests: Comment," American Economic Review, American Economic Association, vol. 82(1), pages 359-362, March.
  • Handle: RePEc:aea:aecrev:v:82:y:1992:i:1:p:359-62

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