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A Max-Min Two-Group Contest with Binary Actions and Incomplete Information à la Global Games

Author

Listed:
  • Davide Bosco

    (Department of Economics, Management and Statistics, University of Milano-Bicocca)

  • Mario Gilli

    (Department of Economics, Management and Statistics, University of Milano-Bicocca)

  • Andrea Sorrentino

    (Department of Economics, Management and Statistics, University of Milano-Bicocca)

Abstract

In this paper we introduce incomplete information à la global games into a max-min two-group contest with binary actions and we characterize the set of equilibria. Depending on whether the complete information assumption is relaxed on the value of the prize or on the cost of providing effort, we obtain different results in terms of equilibrium selection: in the first case, there exists both an equilibrium in (monotonic) switching strategies and an equilibrium robust to incomplete information in the sense of Kajii and Morris [1997], in which no player exerts effort in both groups, whereas in the second one there exists a unique equilibrium in (monotonic) switching-strategies.

Suggested Citation

  • Davide Bosco & Mario Gilli & Andrea Sorrentino, 2024. "A Max-Min Two-Group Contest with Binary Actions and Incomplete Information à la Global Games," Working Papers 2024.25, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2024.25
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    More about this item

    Keywords

    Group contests; incomplete information; global games;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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