Uncertainty in Conflicts
36 Pages Posted: 9 Nov 2010
Date Written: October 4, 2010
This paper theoretically assesses the role that uncertainty plays in the intensity of conflicts. The standard two-player rent-seeking contest model (Tullock, 1980) is extended to allow for privately known subjective values of the prize. The conflict is modeled as a Bayesian game on which each player’s valuation is drawn independently from arbitrary distributions. We find sufficient conditions for when first-order and second-order stochastic refinements in the distributions cause predictable movements in the conflict’s dissipation. We focus on arbitrary contest success functions and arbitrary independent distributions for each player, allowing us to extend our analysis beyond the case of symmetric equilibria.
Keywords: Conflict, Uncertainty, Monotone Comparative Statics, Bayesian Games
JEL Classification: C70, C72, D74, D80
Suggested Citation: Suggested Citation
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By Ohad Kadan