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The Dark Side of the Force: Evolutionary Equilibrium in Contests with Stochastic Entry

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  • Gu, Yiquan
  • Hehenkamp, Burkhard
  • Leininger, Wolfgang

Abstract

We study evolutionarily stable strategy (ESS) in contests where participation is stochastic. When participation probabilities are given, players exert more effort In ESS than under Nash. Ex-ante overdissipation occurs when participation is suff. likely and discriminative power of the contest suff. high. When entry is costly and endogenous, players’ entry is more likely, more costly, and less profitable in ESS than under Nash. Ex-ante overdissipation also occurs for concave impact functions.

Suggested Citation

  • Gu, Yiquan & Hehenkamp, Burkhard & Leininger, Wolfgang, 2017. "The Dark Side of the Force: Evolutionary Equilibrium in Contests with Stochastic Entry," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168168, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc17:168168
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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