Engaging in Wars of Attrition
Maxime Menuet and
Petros G. Sekeris
Annals of Economics and Statistics, 2022, issue 147, 79-100
This article studies the incentives to engage in a war of attrition under both, complete and incomplete information. In our setup, a war of attrition can unilaterally be decided by any player, and if neither player engages in a war of attrition they each obtain some pre-determined payoff. Under complete information, we demonstrate that if players play pure-strategies, they engage in a war of attrition where one player will drop out immediately. In a mixed strategy subgame perfect equilibrium, no player engages in a war of attrition. Under incomplete information, players never engage in a war of attrition at the symmetric perfect Bayesian equilibrium. When allowing players to decide to initiate a confrontation we therefore demonstrate that there can never be a war of attrition with a strictly positive drop out time along the equilibrium path.
Keywords: War of Attrition; Conflict Initiation; Non-cooperative Game (search for similar items in EconPapers)
JEL-codes: C72 D74 D82 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2022:i:147:p:79-100
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