TY - JOUR
T1 - When to confront
T2 - The role of patience
AU - Sandroni, Alvaro
AU - Urgun, Can
N1 - Publisher Copyright:
© 2018 American Economic Association.
PY - 2018/8/1
Y1 - 2018/8/1
N2 - This paper examines the effects of patience on ordinary conflicts such as divorce, price wars, and commercial litigation. Players optimally decide when, if ever, to start a destructive confrontation. In the unique equilibrium, there is a tight connection between patience, aggressiveness, and strength. In particular, patience may lead to immediate confrontation (the most inefficient outcome). This inefficiency is caused by preemptive moves that deny option values to the opponent.
AB - This paper examines the effects of patience on ordinary conflicts such as divorce, price wars, and commercial litigation. Players optimally decide when, if ever, to start a destructive confrontation. In the unique equilibrium, there is a tight connection between patience, aggressiveness, and strength. In particular, patience may lead to immediate confrontation (the most inefficient outcome). This inefficiency is caused by preemptive moves that deny option values to the opponent.
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U2 - 10.1257/mic.20150309
DO - 10.1257/mic.20150309
M3 - Article
AN - SCOPUS:85051558812
SN - 1945-7669
VL - 10
SP - 219
EP - 252
JO - American Economic Journal: Microeconomics
JF - American Economic Journal: Microeconomics
IS - 3
ER -