The timing of contests

Gilles Grandjean, Petros Sekeris

    Research output: Contribution to journalArticlepeer-review

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    Abstract

    We develop a simple model to analyze the timing of contests. When the odds of winning a contest are exogenously given, we show that if either the players discount the future or if the total cost of contest is smaller in the future, there exist subgame perfect equilibria where both players settle, anticipating a contest in the future. With endogenous efforts, the aggregate efforts expanded in a contest are smaller if the contest occurs in the future when the relative effort productivities remain constant or diverge over time, thus creating scope for delay in contests. When the effort productivities converge over time, the total efforts may be greater under a future contest. As a consequence players either settle over the two periods, or else they initiate a contest immediately.
    Original languageEnglish
    Pages (from-to)1-12
    JournalDefence and Peace Economics
    Early online date27 Mar 2015
    DOIs
    Publication statusPublished - 2015

    Keywords

    • WNU
    • Delay
    • Contest
    • Dynamic Game
    • War

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