Preemption Contests Between Groups

38 Pages Posted: 29 May 2019

See all articles by Stefano Barbieri

Stefano Barbieri

Tulane University - Department of Economics

Kai A. Konrad

Max Planck Institute for Tax Law and Public Finance; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); IZA Institute of Labor Economics

David A. Malueg

University of California Riverside

Multiple version iconThere are 2 versions of this paper

Date Written: May 14, 2019

Abstract

We consider a preemption game between groups where the first agent to take a costly action wins the prize on behalf of his group. We describe the equilibrium solution of this problem when players differ in their own costs of action and these costs are private information. The equilibrium is typically characterized by delay. The nature of the equilibrium depends on key parameters such as the number of groups and their size. More competition between groups reduces delay, whereas in larger groups members of a given cost type are more reluctant to act but may yield an earlier resolution of the conflict. We analyze asymmetries across groups, focusing on group size and strength of the externalities within groups.

Keywords: preemption, free riding, dynamic conflict, inter-group conflict, dynamic conflict, incomplete information, waiting

JEL Classification: D74, H41, L13

Suggested Citation

Barbieri, Stefano and Konrad, Kai A. and Malueg, David A., Preemption Contests Between Groups (May 14, 2019). Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2019-09. Available at SSRN: https://ssrn.com/abstract=3394762 or http://dx.doi.org/10.2139/ssrn.3394762

Stefano Barbieri

Tulane University - Department of Economics ( email )

New Orleans, LA 70118
United States

Kai A. Konrad (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

HOME PAGE: http://www.tax.mpg.de/en/pub/home.cfm

Centre for Economic Policy Research (CEPR)

90-98 Goswell Road
London, EC1V 7RR
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, 81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, 53072
Germany

David A. Malueg

University of California Riverside ( email )

Economics Department
3136 Sproul Hall
Riverside, CA 92505
United States
951 827 1494 (Phone)

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