IDEAS home Printed from https://ideas.repec.org/p/syd/wpaper/2123-7867.html
   My bibliography  Save this paper

Treasure game

Author

Listed:
  • Matros, Alexander
  • Smirnov, Vladimir

Abstract

A prize is located at an unknown point on an island. In every period, each of n players searches part of the previously unsearched portion of the island. If a player finds the prize alone he wins it and the game ends. Players have a per-period discount factor and a search cost proportional to area searched. Superior symmetric Markov perfect equilibria are characterized. Equilibria for n ≥ 2 can exhibit two types of inefficiency: a tragedy of the commons (for small islands) and free riding (for large islands). For n ≥ 3, equilibrium properties are non-monotonic: players may be better off searching larger islands. The model is very general: applications include R&D races, team production, and extraction of exhaustible resources.

Suggested Citation

  • Matros, Alexander & Smirnov, Vladimir, 2011. "Treasure game," Working Papers 2011-10, University of Sydney, School of Economics, revised May 2014.
  • Handle: RePEc:syd:wpaper:2123/7867
    as

    Download full text from publisher

    File URL: http://econ-wpseries.com/2011/201110-02.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Barbieri, Stefano & Malueg, David A., 2010. "Threshold uncertainty in the private-information subscription game," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 848-861, December.
    2. Leslie M. Marx & Steven A. Matthews, 2000. "Dynamic Voluntary Contribution to a Public Project," Review of Economic Studies, Oxford University Press, vol. 67(2), pages 327-358.
    3. Reinganum, Jennifer F., 1981. "Dynamic games of innovation," Journal of Economic Theory, Elsevier, vol. 25(1), pages 21-41, August.
    4. Anat R. Admati & Motty Perry, 1991. "Joint Projects without Commitment," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 259-276.
    5. Alessandro Bonatti & Johannes Horner, 2011. "Collaborating," American Economic Review, American Economic Association, vol. 101(2), pages 632-663, April.
    6. Jay Pil Choi & Heiko Gerlach, 2014. "Selection Biases in Complementary R&D Projects," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 23(4), pages 899-924, December.
    7. Richard Ericson & Ariel Pakes, 1995. "Markov-Perfect Industry Dynamics: A Framework for Empirical Work," Review of Economic Studies, Oxford University Press, vol. 62(1), pages 53-82.
    8. Glenn C. Loury, 1979. "Market Structure and Innovation," The Quarterly Journal of Economics, Oxford University Press, vol. 93(3), pages 395-410.
    9. Taylor, Curtis R, 1995. "Digging for Golden Carrots: An Analysis of Research Tournaments," American Economic Review, American Economic Association, vol. 85(4), pages 872-890, September.
    10. Keller, Godfrey & Rady, Sven, 2010. "Strategic experimentation with Poisson bandits," Theoretical Economics, Econometric Society, vol. 5(2), May.
    11. Godfrey Keller & Sven Rady & Martin Cripps, 2005. "Strategic Experimentation with Exponential Bandits," Econometrica, Econometric Society, vol. 73(1), pages 39-68, January.
    12. Yeon-Koo Che & Ian Gale, 2003. "Optimal Design of Research Contests," American Economic Review, American Economic Association, vol. 93(3), pages 646-671, June.
    13. Kaylan Chatterjee & Robert Evans, 2004. "Rivals' Search for Buried Treasure: Competition and Duplication in R&D," RAND Journal of Economics, The RAND Corporation, vol. 35(1), pages 160-183, Spring.
    14. Ngo Long, 2011. "Dynamic Games in the Economics of Natural Resources: A Survey," Dynamic Games and Applications, Springer, vol. 1(1), pages 115-148, March.
    15. Nicolas Klein & Sven Rady, 2011. "Negatively Correlated Bandits," Review of Economic Studies, Oxford University Press, vol. 78(2), pages 693-732.
    16. Patrick Bolton & Christopher Harris, 1999. "Strategic Experimentation," Econometrica, Econometric Society, vol. 67(2), pages 349-374, March.
    17. Dasgupta, Partha & Stiglitz, Joseph, 1980. "Industrial Structure and the Nature of Innovative Activity," Economic Journal, Royal Economic Society, vol. 90(358), pages 266-293, June.
    18. Fershtman, Chaim & Rubinstein, Ariel, 1997. "A Simple Model of Equilibrium in Search Procedures," Journal of Economic Theory, Elsevier, vol. 72(2), pages 432-441, February.
    19. Tom Lee & Louis L. Wilde, 1980. "Market Structure and Innovation: A Reformulation," The Quarterly Journal of Economics, Oxford University Press, vol. 94(2), pages 429-436.
    20. Marco Battaglini & Salvatore Nunnari & Thomas Palfrey, 2011. "The Free Rider Problem: a Dynamic Analysis," Working Papers 1354, Princeton University, Department of Economics, Econometric Research Program..
    21. Richard L. Fullerton & R. Preston McAfee, 1999. "Auctioning Entry into Tournaments," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 573-605, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Matros, Alexander & Smirnov, Vladimir, 2016. "Duplicative search," Games and Economic Behavior, Elsevier, vol. 99(C), pages 1-22.

    More about this item

    Keywords

    R&D; search; uncertainty.;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:syd:wpaper:2123/7867. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vanessa Holcombe). General contact details of provider: http://edirc.repec.org/data/deusyau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.