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Endogenous timing in general rent-seeking and conflict models

Author

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  • Grégoire Rota-Graziosi

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

  • Magnus Hoffmann

    (TUB - Technische Universität Berlin)

Abstract

We examine simultaneous versus sequential choice of effort in a two-player contest. The timing of moves, determined in a preplay stage prior to the contest subgame, as well as the value of the prize is allowed to be endogenous. Contrary to endogenous timing models with an exogenously fixed prize the present paper finds the following: (1) Players may decide to choose their effort simultaneously in the subgame perfect equilibrium (SPE) of the extended game. (2) The SPE does not need to be unique, in particular, there is no unique SPE with sequential moves if the direct costs of effort are zero. (3) Symmetry among players does not rule out incentives for precommitment to effort locally away from the Cournot-Nash level. (4) Finally, there may be no correlation between win probability and strategic incentives in our framework; a finding most central in the analysis of fixedprize contests.

Suggested Citation

  • Grégoire Rota-Graziosi & Magnus Hoffmann, 2012. "Endogenous timing in general rent-seeking and conflict models," Post-Print halshs-00689738, HAL.
  • Handle: RePEc:hal:journl:halshs-00689738
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00689738
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    9. Grégoire ROTA-GRAZIOSI, 2016. "Implementing Tax Coordination and Harmonization through Voluntary Commitment," Working Papers P181, FERDI.
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    11. Baumann, Florian & Denter, Philipp & Friehe, Tim, 2013. "Hide or show? Endogenous observability of private precautions against crime when property value is private information," DICE Discussion Papers 115, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

    More about this item

    Keywords

    Contests; Endogenous prize; Endogenous timing; Cournot-Nash game; Stackelberg game;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D30 - Microeconomics - - Distribution - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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