Wagman, Liad and Conitzer, Vincent (2008): Choosing Fair Lotteries to Defeat the Competition. Forthcoming in:
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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.
|Item Type:||MPRA Paper|
|Original Title:||Choosing Fair Lotteries to Defeat the Competition|
|Keywords:||Strategic gambling, Nash equilibrium, fair lotteries|
|Subjects:||D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L20 - General
C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C70 - General
C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games
|Depositing User:||Liad Wagman|
|Date Deposited:||10. Sep 2008 06:23|
|Last Modified:||21. Feb 2013 04:08|
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