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

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  • Davide Bosco
  • Mario Gilli
  • Andrea Sorrentino

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 exist 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 545, University of Milano-Bicocca, Department of Economics.
    • Handle: RePEc:mib:wpaper:545
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    References listed on IDEAS

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    1. Carlsson, H. & van Damme, E.E.C., 1991. "Equilibrium selection in stag hunt games," Other publications TiSEM bd92d0ae-790f-40ad-afea-4, Tilburg University, School of Economics and Management.
    2. repec:wly:soecon:v:83:1:y:2016:p:105-125 is not listed on IDEAS
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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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