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- Subgame perfect equilibrium: wars of attrition [Game theory]
- Polak, Ben
- Educação Superior::Ciências Sociais Aplicadas::Economia
- Presents a class that analyzes some games on Economics. The Professor first play and then analyze wars of attrition; the games that afflict trench warfare, strikes, and businesses in some competitive settings. The Professor find long and damaging fights can occur in class in these games even when the prizes are small in relation to the accumulated costs. These could be caused by irrationality or by players' having other goals like pride or reputation. But we argue that long, costly fights should be expected in these games even if everyone is rational and has standard goals. We show this first in a two-period version of the game and then in a potentially infinite version. There are equilibria in which the game ends fast without a fight, but there are also equilibria that can involve long fights. The only good news is that, the longer the fight and the higher the cost of fighting, the lower is the probability of such a fight
- Yale University, Open Yale Courses
- Educação Superior::Ciências Sociais Aplicadas::Economia::Teoria Monetária e Financeira
- To analyze some games on Economics
- Duration: 1 h, 15 min, 36 s. To hear this resource its necessary the instalation of Quick time. Available at: <http://www.apple.com/pt/quicktime/>
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