Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/74634
Authors: 
Metzger, Lars Peter
Year of Publication: 
2011
Series/Report no.: 
Bonn Econ Discussion Papers 09/2011
Abstract: 
Second price allpay auctions (wars of attritions) have an evolutionarily stable equilibrium in pure strategies if valuations are private information. I show that for any level of uncertainty there exists a pure deviation strategy close to the equilibrium strategy such that for some valuations the equilibrium strategy has a selective disadvantage against the deviation if the population mainly plays the deviation strategy. There is no deviation strategy with this destabilizing property for all valuations if the distribution of valuations has a monotonic hazard rate. I argue that in the Bayesian game studied here, a mass deviation can be caused by the entry of a small group of agents. Numeric calculations indicate that the closer the deviation strategy to the equilibrium strategy, the less valuations are destabilizing. I show that the equilibrium strategy does not satisfy continuous stability.
Subjects: 
Continuous Strategies
Evolutionary Stability
War of Attrition
Strict Equilibrium
Neighborhood Invader Strategy
Continuous Stability
Evolutionary Robustness
JEL: 
C72
C73
D44
Document Type: 
Working Paper

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