The War of Attrition in Continuous Time with Complete Information

Hendricks, Kenneth; Weiss, Andrew; Wilson, Charles Morrow

doi:10.2307/2526827

Cited by 167 publications

(142 citation statements)

References 1 publication

Supporting

Mentioning

133

Contrasting

Unclassified

Order By: Relevance

“…Furthermore, the payoff to the leader strictly decreases as time progresses, i.e., conceding early is better than conceding late. Hendricks et al [3] axiomatize and analyze a general setting of complete information WoA. Our game violates one crucial axiom of [3]: in our game, the payoff to the leader does not decrease with time.…”

Section: Introductionmentioning

confidence: 88%

A game of timing and visibility

Lotker

Patt-Shamir

Tuttle

2008

Games and Economic Behavior

View full text Add to dashboard Cite

We consider the following abstraction of competing publications. There are n players in the game. Each player i chooses a point x i in the interval [0,1], and a player's payoff is the distance from its point x i to the next larger point, or to 1 if x i is the largest. For this game, we give a complete characterization of the Nash equilibrium for the two-player game, and, more important, we give an efficient approximation algorithm to compute numerically the symmetric Nash equilibrium for the n-player game. The approximation is computed via a discrete version of the game. In both cases, we show that the (symmetric) equilibrium is unique. Our algorithmic approach to the n-player game is non-standard in that it does not involve solving a system of differential equations. We believe that our techniques can be useful in the analysis of other timing games.

show abstract

Section: Introductionmentioning

confidence: 88%

A game of timing and visibility

Lotker

Patt-Shamir

Tuttle

2008

Games and Economic Behavior

View full text Add to dashboard Cite

show abstract

“…If the game is played under complete information -except regarding the type of EU -and using only pure strategies, then there will be no substantial delay. Instead the losing player will give up right away rather than enduring any delay (Hendricks et al, 1988). In settings of incomplete information, the game may feature some delay (Alesina and Drazen, 1991).…”

Section: Solution With Eu Conditionalitymentioning

confidence: 99%

“…The reasoning of lemma (3) is the common intuition behind the war of attrition where the player that can establish that he is willing to wait longer -either by demonstrating his ability to wait (incomplete information) or because his ability to wait is known (complete information) -wins the game after the second player realises the first one's ability to hold out longer and maximises his payoff by giving up right away (see Bliss and Nalebuff, 1984;Alesina and Drazen, 1991;Hendricks et al, 1988). The basic reasoning of lemma (3) can thus be summarised by the function h =t g −t f − 1, which, for positive values, says that the government is winning, and for negative values says that the firms are winning.…”

Section: Solution With Eu Conditionalitymentioning

confidence: 99%

See 1 more Smart Citation

Can EU conditionality remedy soft budget constraints in transition countries?

Brücker

Schröder

Weise

2005

Journal of Comparative Economics

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in September 2003Abstract Soft budget constraints (SBCs) are a persistent feature of transition economies and have been blamed for i.a. a lack of fiscal consolidation and sluggish growth. EU eastward enlargement has -among other things -been conditioned on tackling SBCs. This paper analyzes such outside conditionality theoretically and empirically. First, modelling the SBC problem as a war of attrition between the applicant countries' governments and firms we find that outside conditionality can foster SBC hardening. Yet, toughening the EU stance or reducing the number of enlargement rounds may have ambiguous effects. Second, estimating SBC hardening in a partial adjustment model by measuring the reaction of employment to output changes we find that EU conditionality did indeed help candidates to fight SBCs. Abstract Soft budget constraints (SBCs) are a persistent feature of transition economies and have been blamed for i.a. a lack of fiscal consolidation and sluggish growth. EU eastward enlargement hasamong other things -been conditioned on tackling SBCs. This paper analyzes such outside conditionality theoretically and empirically. First, modelling the SBC problem as a war of attrition between the applicant countries' governments and firms we find that outside conditionality can foster SBC hardening. Yet, toughening the EU stance or reducing the number of enlargement rounds may have ambiguous effects. Second, estimating SBC hardening in a partial adjustment model by measuring the reaction of employment to output changes we find that EU conditionality did indeed help candidates to fight SBCs.

show abstract

“…On the one hand there is the literature on mainly deterministic timing problems in continuous time that is inspired by a wide range of applications, such as preemption models in economics (e.g., Fudenberg and Tirole (1985); Hendricks and Wilson (1992)) or wars of attrition in biology or economics as well (e.g., Hendricks et al (1988)). These classes of models are quite stylized with a systematic first or second-mover advantage.…”

Section: Introductionmentioning

confidence: 99%

Subgame-perfect equilibria in stochastic timing games

Riedel

Steg

2017

Journal of Mathematical Economics

View full text Add to dashboard Cite

Abstract. We introduce a notion of subgames for stochastic timing games and the related notion of subgame-perfect equilibrium in possibly mixed strategies. While a good notion of subgame-perfect equilibrium for continuous-time games is not available in general, we argue that our model is the appropriate version for timing games. We show that the notion coincides with the usual one for discrete-time games. Many timing games in continuous time have only equilibria in mixed strategies -in particular preemption games, which often occur in the strategic real option literature. We provide a sound foundation for some workhorse equilibria of that literature, which has been lacking as we show. We obtain a general constructive existence result for subgame-perfect equilibria in preemption games and illustrate our findings by several explicit applications. JEL subject classification: C61, C73, D21, L12MSC2010 subject classification: 60G40, 91A25, 91A40, 91A55

show abstract

The War of Attrition in Continuous Time with Complete Information

Cited by 167 publications

References 1 publication

A game of timing and visibility

A game of timing and visibility

Can EU conditionality remedy soft budget constraints in transition countries?

Subgame-perfect equilibria in stochastic timing games

Contact Info

Product

Resources

About