The Generalized War of Attrition

Jeremy I. Bulow and Paul Klemperer

No 1564, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We generalize the War of Attrition model to allow for N+K firms competing for N prizes. Two special cases are of particular interest. First, if firms continue to pay their full costs after dropping out (as in a standard-setting context), each firm’s exit time is independent both of K and of the actions of other players. Second, in the limit in which firms pay no costs after dropping out (as in a natural-oligopoly problem), the field is immediately reduced to N+1 firms. Furthermore, we have perfect sorting, so it is always the K–1 lowest-value players who drop out in zero time, even though each player’s value is private information to the player. We apply our model to politics, explaining the length of time it takes to collect a winning coalition to pass a bill.

Keywords: 'Strategic Independence'; 'Twoness'; Auctions; Natural Monopoly; Oligopoly; Political Decision Making; Standards; War of Attrition (search for similar items in EconPapers)
JEL-codes: D43 D44 L13 O30 (search for similar items in EconPapers)
Date: 1997-01
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=1564 (application/pdf)

Related works:
Journal Article: The Generalized War of Attrition (1999)
Working Paper: The Generalized War of Attrition (1999)
Working Paper: The Generalized War of Attrition (1997)
Working Paper: The Generalized War of Attrition (1996)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:1564

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=1564

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().