The Dark Side of the Force: Evolutionary Equilibrium in Contests with Stochastic Entry

Yiquan Gu, Burkhard Hehenkamp and Wolfgang Leininger

VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: We study evolutionarily stable strategy (ESS) in contests where participation is stochastic. When participation probabilities are given, players exert more effort In ESS than under Nash. Ex-ante overdissipation occurs when participation is suff. likely and discriminative power of the contest suff. high. When entry is costly and endogenous, players’ entry is more likely, more costly, and less profitable in ESS than under Nash. Ex-ante overdissipation also occurs for concave impact functions.

JEL-codes: C73 D72 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-cta, nep-evo, nep-gth and nep-ore
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc17:168168

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