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Endogenous strength in conflicts

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  • Beviá, Carmen
  • Corchón, Luis C.

Abstract

In this paper we study a two stage contest where the strength of players in the second stage depends on the result of the contest in the first stage. We show that this contest displays properties that are not present in one shot contests. Non-symmetric players make different efforts in the first stage and rent dissipation in the first period may be large. We study the conditions under which the discouragement effect holds. In addition, new issues emerge like the evolution of the strengths and the shares of the prize during the game.

Suggested Citation

  • Beviá, Carmen & Corchón, Luis C., 2011. "Endogenous strength in conflicts," UC3M Working papers. Economics we1113, Universidad Carlos III de Madrid. Departamento de Economía.
  • Handle: RePEc:cte:werepe:we1113
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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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