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Engaging in Wars of Attrition

Author

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  • Maxime Menuet
  • Petros G. Sekeris

Abstract

This article studies the incentives to engage in a war of attrition under both, complete and incomplete information. In our setup, a war of attrition can unilaterally be decided by any player, and if neither player engages in a war of attrition they each obtain some pre-determined payoff. Under complete information, we demonstrate that if players play pure-strategies, they engage in a war of attrition where one player will drop out immediately. In a mixed strategy subgame perfect equilibrium, no player engages in a war of attrition. Under incomplete information, players never engage in a war of attrition at the symmetric perfect Bayesian equilibrium. When allowing players to decide to initiate a confrontation we therefore demonstrate that there can never be a war of attrition with a strictly positive drop out time along the equilibrium path.

Suggested Citation

  • Maxime Menuet & Petros G. Sekeris, 2022. "Engaging in Wars of Attrition," Annals of Economics and Statistics, GENES, issue 147, pages 79-100.
    • Handle: RePEc:adr:anecst:y:2022:i:147:p:79-100
    DOI: https://doi.org/10.2307/48684787
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    References listed on IDEAS

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    1. Alesina, Alberto & Drazen, Allan, 1991. "Why Are Stabilizations Delayed?," American Economic Review, American Economic Association, vol. 81(5), pages 1170-1188, December.
    2. Bagwell, Kyle, 1995. "Commitment and observability in games," Games and Economic Behavior, Elsevier, vol. 8(2), pages 271-280.
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    Cited by:

    1. Antonis Adam & Maxime Menuet & Petros G. Sekeris, 2024. "Conflict under the shadow of elections," Public Choice, Springer, vol. 200(1), pages 173-199, July.

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    More about this item

    Keywords

    War of Attrition; Conflict Initiation; Non-cooperative Game;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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