Continuous-Time Best-Response and Related Dynamics in Tullock Contests with Convex Costs

Edith Elkind, Abheek Ghosh and Paul W. Goldberg

Papers from arXiv.org

Abstract: Tullock contests model real-life scenarios that range from competition among proof-of-work blockchain miners to rent-seeking and lobbying activities. We show that continuous-time best-response dynamics in Tullock contests with convex costs converges to the unique equilibrium using Lyapunov-style arguments. We then use this result to provide an algorithm for computing an approximate equilibrium. We also establish convergence of related discrete-time dynamics, e.g., when the agents best-respond to the empirical average action of other agents. These results indicate that the equilibrium is a reliable predictor of the agents' behavior in these games.

Date: 2024-02, Revised 2024-10
New Economics Papers: this item is included in nep-gth and nep-mic
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