Munich Personal RePEc Archive

Choosing Fair Lotteries to Defeat the Competition

Wagman, Liad and Conitzer, Vincent (2008): Choosing Fair Lotteries to Defeat the Competition. Forthcoming in:

[img]
Preview
PDF
MPRA_paper_10375.pdf

Download (224Kb) | Preview

Abstract

We study the following game: each agent i chooses a lottery over nonnegative numbers whose expectation is equal to his budget b_i. The agent with the highest realized outcome wins and agents only care about winning). This game is motivated by various real-world settings where agents each choose a gamble and the primary goal is to come out ahead. Such settings include patent races, stock market competitions, and R&D tournaments. We show that there is a unique symmetric equilibrium when budgets are equal. We proceed to study and solve extensions, including settings where agents must obtain a minimum outcome to win; where agents choose their budgets (at a cost); and where budgets are private information.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.