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A Tug of War Team Contest

Häfner, Samuel. (2015) A Tug of War Team Contest. WWZ Working Papers, 2015 (04).

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Abstract

This paper analyzes a tug of war contest between two teams. In each round of the tug of war a pair of agents from the opposing teams competes in a private value all-pay auction with asymmetric type distributions and eort effectiveness. Whichever team arrives first at a given lead in terms of battle victories over the opponent wins the tug of war. There exists a unique Markov-perfect equilibrium in bidding strategies that depend on the player's valuation and on the history through the current state of the tug of war only. We derive rich comparative statics for this equilibrium by using the fact that the states of the tug of war evolve according to a time-homogeneous absorbing Markov chain.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Mikroökonomische Theorie (Nöldeke)
12 Special Collections > WWZ Publications > WWZ Discussion Papers and Working Papers
UniBasel Contributors:Häfner, Samuel
Item Type:Working Paper
Publisher:WWZ, University of Basel
Number of Pages:35
Note:Publication type according to Uni Basel Research Database: Discussion paper / Internet publication
Language:English
Identification Number:
  • handle: RePEc:bsl:wpaper:2015/04
Last Modified:08 Mar 2018 13:32
Deposited On:08 Mar 2018 13:32

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