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The lifeboat problem
[working paper]
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Wissenschaftszentrum Berlin für Sozialforschung gGmbH
Abstract We study an all-pay contest with multiple identical prizes (lifeboat seats). Prizes are partitioned into subsets of prizes (lifeboats). Players play a two-stage game. First, each player chooses an element of the partition (a lifeboat). Then each player competes for a prize in the subset chosen (a se... view more
We study an all-pay contest with multiple identical prizes (lifeboat seats). Prizes are partitioned into subsets of prizes (lifeboats). Players play a two-stage game. First, each player chooses an element of the partition (a lifeboat). Then each player competes for a prize in the subset chosen (a seat). We characterize and compare the subgame perfect equilibria in which all players employ pure strategies or all players play identical mixed strategies in the first stage. We find that the partitioning of prizes allows for coordination failure among players when they play nondegenerate mixed strategies and this can shelter rents and reduce rent dissipation compared to some of the less efficient pure strategy equilibria. (author's abstract)... view less
Keywords
price; competition; playing; equilibrium; formation of prices; game theory; match
Classification
National Economy
Document language
English
Publication Year
2011
City
Berlin
Page/Pages
20 p.
Series
Discussion Papers / Wissenschaftszentrum Berlin für Sozialforschung, Schwerpunkt Märkte und Politik, Forschungsprofessur und Projekt The Future of Fiscal Federalism, SP II 2011-106
Handle
https://hdl.handle.net/10419/54592
Status
Published Version; reviewed
Licence
Deposit Licence - No Redistribution, No Modifications