A tug-of-war team contest

Häfner, Samuel. (2017) A tug-of-war team contest. Games and Economic Behavior, 104. pp. 372-391.

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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 value distributions and effort 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 which depend on the respective player's valuation and the current state of the tug-of-war. We derive rich comparative statics for this equilibrium by using the fact that the state of the tug-of-war evolves according to a time-homogeneous absorbing Markov chain.
Faculties and Departments:06 Faculty of Business and Economics
06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Mikroökonomische Theorie (Nöldeke)
UniBasel Contributors:Häfner, Samuel
Item Type:Article, refereed
Article Subtype:Research Article
Note:Publication type according to Uni Basel Research Database: Journal article
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Last Modified:27 Jun 2018 08:53
Deposited On:27 Jun 2018 08:53

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