The art of concession in General Lotto games

Can intentionally decreasing one’s own competitive abilities provide strategic benefits in adversarial environments? We investigate whether a competitor can gain an advantage by conceding valuable assets to an opponent under a well studied framework known as General Lotto games. While intuition suggests this cannot be done, we demonstrate that concessions do offer strategic benefits when made correctly. We explore concessions in two settings: 1) General Lotto games, which depict 1-vs.-1 adversarial interactions, and 2) coalitional Lotto games, which depict two independent players competing against a common adversary (2-vs.-1) on non-overlapping contests. Our first result shows that conceding budgetary resources cannot be advantageous in either setting. However, we demonstrate that conceding valuable contests can be beneficial in the coalitional setting, characterizing optimal concessions when they exist. When both independent players in the coalitional setting have the option to concede, we characterize the Nash equilibria that emerge in this strategic scenario.