Gu, Y 
ORCID: 0000-0002-4594-4852, Hehenkamp, Burkhard and Leininger, Wolfgang
(2019)
Evolutionary equilibrium in contests with stochastic participation: Entry, effort and overdissipation.
Journal of Economic Behavior and Organization, 164.
pp. 469-485.
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Abstract
This paper examines the evolutionary stability of behaviour in contests where players’ participation can be stochastic. We find, for exogenously given participation probabilities, players exert more effort under the concept of a finite-population evolutionarily stable strategy (FPESS) than under Nash equilibrium (NE). We show that there is ex-ante overdissipation under FPESS for sufficiently large participation probabilities, if, and only if, the impact function is convex. With costly endogenous entry, players enter the contest with a higher probability and exert more effort under FPESS than under NE. Importantly, under endogenous entry, overdissipation can occur for all (Tullock) contest success functions, in particular those with concave impact functions.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | Contests with stochastic participation, Overdissipation, Evolutionarily stable strategy, Finite population, Endogenous entry |
| Depositing User: | Symplectic Admin |
| Date Deposited: | 14 Jun 2019 08:13 |
| Last Modified: | 19 Jan 2023 00:40 |
| DOI: | 10.1016/j.jebo.2019.06.011 |
| Related URLs: | |
| URI: | https://livrepository.liverpool.ac.uk/id/eprint/3045809 |
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