Information acquisition in a war of attrition

Kyungmin Kim, Frances Zhiyun Xu Lee

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

We consider a war of attrition where the players can learn about a state that determines their payoffs at stochastic deadline. We study how the incentives to acquire information depend on the (un)verifiability of information and its implications for efficiency. Unverifiability creates distortions (strategic delay in concession or duplication in information acquisition), but encourages information acquisition. In our model, provided that the information acquisition cost is small, these two effects cancel each other out and the players' expected payoffs in symmetric equilibrium are identical whether information is verifiable or not. We also show that shortening deadlines may prolong the conflict.

Original languageEnglish (US)
Pages (from-to)37-78
Number of pages42
JournalAmerican Economic Journal: Microeconomics
Volume6
Issue number2
DOIs
StatePublished - Jan 1 2014
Externally publishedYes

Fingerprint

Information acquisition
War of attrition
Deadline
Verifiability
Incentives
Costs
Concession

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

Cite this

Information acquisition in a war of attrition. / Kim, Kyungmin; Lee, Frances Zhiyun Xu.

In: American Economic Journal: Microeconomics, Vol. 6, No. 2, 01.01.2014, p. 37-78.

Research output: Contribution to journalArticle

Kim, Kyungmin ; Lee, Frances Zhiyun Xu. / Information acquisition in a war of attrition. In: American Economic Journal: Microeconomics. 2014 ; Vol. 6, No. 2. pp. 37-78.
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