Potential Competition in Preemption Games

Bobtcheff, Catherine and Mariotti, Thomas (2012) Potential Competition in Preemption Games. Games and Economic Behavior, 75 (1). pp. 53-66.

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Official URL: http://tse-fr.eu/pub/25246

Abstract

We consider a preemption game with two potential competitors who come into play at some random secret times. The presence of a competitor is revealed to a player only when the former moves, which terminates the game. We show that all perfect Bayesian equilibria give rise to the same distribution of players' moving times. Moreover, there exists a unique perfect Bayesian equilibrium in which each player's behavior from any time on is independent of the date at which she came into play. We find that competitive pressure is nonmonotonic over time, and that private information tends to alleviate rent dissipation. Our results have a natural interpretation in terms of eroding reputations.

Item Type: Article
Language: English
Date: May 2012
Refereed: Yes
JEL codes: C73 - Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
D82 - Asymmetric and Private Information
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 09 Jul 2014 17:21
Last Modified: 07 Mar 2018 13:22
OAI ID: oai:tse-fr.eu:25246
URI: http://publications.ut-capitole.fr/id/eprint/15169

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