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Stability of dynamic asymmetric contests with endogenous prizes

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  • Akio Matsumoto

    (Chuo University)

  • Ferenc Szidarovszky

    (Corvinus University)

Abstract

Repeated asymmetric contest games are examined under conditions which guarantee the existence and uniqueness of pure Nash equilibrium (Hirai and Szidarovszky 2013). Conditions are derived for the local asymptotical stability of the equilibrium under continuous and discrete dynamics with gradient adjustments. In both cases, a crucial assumption is the nonexistence of a dominant player at the equilibrium level. In the case of continuous time scales, this is sufficient for stability, and in the discrete case, the speeds of adjustments have to be sufficiently small. As special cases, symmetric and semi-symmetric games are analyzed.

Suggested Citation

  • Akio Matsumoto & Ferenc Szidarovszky, 2022. "Stability of dynamic asymmetric contests with endogenous prizes," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 17(1), pages 29-40, January.
    • Handle: RePEc:spr:jeicoo:v:17:y:2022:i:1:d:10.1007_s11403-020-00290-6
    DOI: 10.1007/s11403-020-00290-6
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