War of attrition
A contest in which both sides pay for every period they stay in, so the prize goes to whoever is willing to keep paying longest.
Often misread asHunting for the strategy that wins, and then reading the randomised equilibrium as cleverness about timing, as though a well-chosen quitting rule outmanoeuvres the opponent.
How to see it
The prize goes to whoever will burn the most getting it
In a war of attrition both sides pay for every moment they stay in, and whoever quits first loses. The winner takes the prize but has paid for the whole contest, and the loser has paid almost as much for nothing. Across the pair, the total spent can approach or exceed what the prize was worth.
The checkIn equilibrium you are exactly indifferent between quitting now and staying another moment. Your randomisation is there to keep the opponent indifferent, not to outwit them, and your own payoff is the same whatever you do within the mix.
Try itTwo people bid for 100 pounds in a contest where both pay what they bid. Add up what the pair has spent when one of them gives up at 60. Ask who paid for the prize, who paid for nothing, and whether either of them made an identifiable mistake.
Games that show it
Know these first
Easily confused with
Sources
- Maynard Smith, J. (1974). Journal of Theoretical Biology 47(1), 209-221.
- Fudenberg, D. & Tirole, J. (1991). MIT Press.