The endgame

Anurag N. Banerjee, Sarit Markovich, Giulio Seccia*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

On December 1st, 2009 President Obama announced that the U.S. troops would have started leaving Afghanistan on July 2011. Rather than simply waiting “the U.S. troops out,” the Taliban forces responded with a spike in attacks followed by a decline as the withdrawal date approached. These, at first, counter-intuitive phenomena, are addressed by studying a two-player, zero-sum game where the duration of the strategic interaction is either known or unknown (i.e., the game can stop at any time with positive probability). We find that, conditional on the players' relative position, players' equilibrium strategies are non-stationary in a known duration game but they are stationary in the unknown duration case. Hence, introducing uncertainty, no matter how small, changes players' optimal behavior qualitatively and discontinuously: qualitatively because their behavior becomes stationary; discontinuously because the equilibrium is stationary only as far as the continuation probability is bounded away from 1.

Original languageEnglish (US)
Pages (from-to)176-192
Number of pages17
JournalGames and Economic Behavior
Volume118
DOIs
StatePublished - Nov 2019

Keywords

  • Conflict resolution
  • Information
  • Stochastic games

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

Fingerprint Dive into the research topics of 'The endgame'. Together they form a unique fingerprint.

Cite this