Working Paper: CEPR ID: DP13738
Authors: Stefano Barbieri; Kai A. Konrad; David A. Malueg
Abstract: We consider a preemption game between groups where the first agent to take a costly action wins the prize on behalf of his group. We describe the equilibrium solution of this problem when players differ in their own costs of action and these costs are private information. The equilibrium is typically characterized by delay. The nature of the equilibrium depends on key parameters such as the number of groups and their size. More competition between groups reduces delay, whereas in larger groups members of a given cost type are more reluctant to act but may yield an earlier resolution of the conflict. We analyze asymmetries across groups, focusing on group size and strength of the externalities within groups.
Keywords: Free Riding; Preemption; Dynamic Conflict; Intergroup Conflict; Incomplete Information; Waiting
JEL Codes: D74; H41; L13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| players' costs (Z22) | players' decisions to act (D79) |
| competitive dynamics between groups (L13) | players' decisions to act (D79) |
| lower costs (D61) | players' likelihood to act sooner (C73) |
| higher costs (J32) | players' tendency to delay actions (D91) |
| competition intensity (L13) | delay (Y60) |
| group size (C92) | reluctance to act (D84) |
| freeriding incentives within groups (H40) | preemption motives (F52) |
| number of groups (C92) | expected payoffs (J33) |