Strategic thinking in contests

Strategic Restraint in Contests

Economic policy is modeled as the outcome of a (political) game between two interest groups. The possible ex-post (realized) outcomes in the game correspond to the proposed policies. In the literature the policies fought for are exogenous. We extend such games by allowing the endogenous determination of the proposed policies. In a first stage the groups decide which policy to lobby for and then...

Strategic Delegation and Mergers in Oligopolistic Contests

In this paper, we combine the strategic delegation approach of FershtmanJudd-Sklivas with contests. The results show that besides a symmetric equilibrium there also exist asymmetric equilibria in which one owner induces pure sales maximization to his manager so that all the other firms drop out of the market. If merging is allowed on an initial stage, the resulting merged subgame perfect equili...

Strategic reasoning in p-beauty contests

This paper analyzes strategic choice in p-beauty contests. First, I show that it is not generally a best reply to guess the expected target value, even in games with n > 2 players, and that iterated best response sequences strictly applied do not induce a choice sequence approximating pk · 0.5. Second, I argue that the beliefs and actions of players typically considered to be level 2–4 are capt...

Strategic thinking in pharmacy

Wishful Thinking in Strategic Environments

Towards developing a theory of systematic biases about strategies, I analyze strategic implications of a particular bias: wishful thinking about the strategies. Considering canonical state spaces for strategic uncertainty, I identify a player as a wishful thinker at a state if she hopes to enjoy the highest payoff that is consistent with her information about the others’ strategies at that stat...