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Opting Out in a War of Attrition

Author

Listed:
  • Mercedes Adamuz

    (Department of Business, Instituto Tecnológico Autónomo de México and Department of Economics, Universitat Autònoma de Barcelona)

Abstract

This paper analyzes a War of Attrition where players enjoy private information about their outside opportunities. The main message is that uncertainty about the possibility that the opponent opts out increases the equilibrium probability of concession.

Suggested Citation

  • Mercedes Adamuz, 2005. "Opting Out in a War of Attrition," Economics Bulletin, AccessEcon, vol. 3(49), pages 1-6.
    • Handle: RePEc:ebl:ecbull:eb-05c70036
    as

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    References listed on IDEAS

    as
    1. Vislie, Jon, 1988. "Equilibrium in a market with sequential bargaining and random outside options," Economics Letters, Elsevier, vol. 26(4), pages 325-328.
    2. Clara Ponsatí & József Sákovics, 2001. "Randomly available outside options in bargaining," Spanish Economic Review, Springer;Spanish Economic Association, vol. 3(4), pages 231-252.
    3. Avner Shaked, 1994. "Opting out: bazaars versus "hi tech" markets," Investigaciones Economicas, Fundación SEPI, vol. 18(3), pages 421-432, September.
    4. Shaked, Avner & Sutton, John, 1984. "Involuntary Unemployment as a Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 52(6), pages 1351-1364, November.
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    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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