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Wars of attrition with spending constraints

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  • Sung‐Ha Hwang
  • Youngwoo Koh

Abstract

We study wars of attrition with spending constraints. Specifically, there are two players with different values of the prize and costs of continuing wars, and they are endowed with limited budgets that can be used during the war. Two players compete by choosing the time at which they intend to give up within the constraints. We find the constrained mixed strategy equilibrium for this model and provide a full characterization of equilibrium depending on whether each player's constraint is binding or nonbinding.

Suggested Citation

  • Sung‐Ha Hwang & Youngwoo Koh, 2024. "Wars of attrition with spending constraints," International Journal of Economic Theory, The International Society for Economic Theory, vol. 20(2), pages 227-242, June.
    • Handle: RePEc:bla:ijethy:v:20:y:2024:i:2:p:227-242
    DOI: 10.1111/ijet.12397
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    References listed on IDEAS

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