The Generalized War of Attrition.

Journal article

The authors model a war of attrition with N+K firms competing for N prizes. In a 'natural oligopoly' context, the K - 1 lowest-value firms drop out instantaneously, even though each firm's value is private information to itself. In a 'standard setting' context, in which every competitor suffers losses until a standard is chosen, even after giving up on its own preferred alternative, each firm's exit time is independent both of K and of other players' actions. The authors' results explain how long it takes to form a winning coalition in politics. Solving the model is facilitated by the revenue equivalence theorem.

Authors: Bulow, J; Klemperer, P

• Journal: American Economic Review
• Volume: 89
• Publication date: 1999-01-01
• ISSN: 0002-8282
• Language: English