Gu, Yiquan Hehenkamp, Burkhard Leininger, Wolfgang
Year of Publication:
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2017: Alternative Geld- und Finanzarchitekturen - Session: Economic Theory No. C03-V1
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.