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Endogenous strength in conflicts

  • Carmen Beviá
  • Luis C. Corchón

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.

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File URL: http://e-archivo.uc3m.es/bitstream/10016/11621/1/we1113.pdf
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Paper provided by Universidad Carlos III, Departamento de Economía in its series Economics Working Papers with number we1113.

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Date of creation: Jun 2011
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Handle: RePEc:cte:werepe:we1113
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  21. Michael McBride & Stergios Skaperdas, 2005. "Explaining Conflict in Low-Income Countries: Incomplete Contracting in the Shadow of the Future," CESifo Working Paper Series 1636, CESifo Group Munich.
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