Caller Number Five and Related Timing Games

Andreas Park and Lones Smith ()

Working Papers from University of Toronto, Department of Economics

Abstract: There are two varieties of timing games in economics: Having more predecessors helps in a war of attrition and hurts in a pre-emption game. This paper introduces and explores a spanning class with rank-order payoffs} that subsumes both as special cases. We assume a continuous time setting with unobserved actions and complete information, and explore how equilibria of these games capture many economic and social timing phenomena --- shifting between phases of slow and explosive (positive probability) stopping.

Inspired by auction theory, we first show how the symmetric Nash equilibria are each equivalent to a different "potential function". This device straightforwardly yields existence and characterization results. The Descartes Rule of Signs, e.g., bounds the number phase transitions. We describe how adjacent timing game phases interact: War of attrition phases are not played out as long as they would be in isolation, but instead are cut short by pre-emptive atoms. We bound the number of equilibria, and compute the payoff and duration of each equilibrium.

Keywords: Games of Timing; War of Attrition; Preemption Game. (search for similar items in EconPapers)
JEL-codes: C73 D81 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth
Date: 2008-04-29
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Journal Article: Caller Number Five and related timing games (2008)
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