 Defense against an opportunistic challenger: Theory and experimentsCary Deck (), Joshua Foster and Hongwei Song European Journal of Operational Research, 2015, vol. 242, issue 2, 501-513 Abstract: This paper considers a contest setting in which a challenger chooses between one of two contests to enter after observing the level of defense at each. Despite the challenger’s chance of success being determined by a proportional contest success function, the defenders effectively find themselves in an all-pay auction that largely dissipates the value of the defended resources because the challenger will target the weaker defender. However, if the defenders form a protective alliance then their expected profits increase despite the fact that a successful challenge is theoretically more likely, given the overall reduction in defense. Controlled laboratory experiments designed to test the model’s predictions are also reported. Observed behavior is generally consistent with the comparative static predictions although challengers exhibit the familiar overbidding pattern. Defenders appear to anticipate this reaction and adjust their behavior accordingly. Keywords: Game theory; Contests; Defense alliances; Experiments; Psychology of decisions (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:242:y:2015:i:2:p:501-513 DOI: 10.1016/j.ejor.2014.10.009 Access Statistics for this article European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati More articles in European Journal of Operational Research from Elsevier |
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