We develop a symmetric incomplete-information continuous-time two-player war-of-attrition game with an option to fight decisively. We show that there exists an essentially unique symmetric Bayesian Nash equilibrium. Under equilibrium, the game does not end immediately, and a costly delay persists even with the availability of the fighting option that ends the game if chosen. In addition, there exists a critical time in which a fight occurs unless a player resigns before that time.
Bibliographical noteFunding Information:
We are grateful to the reviewer for valuable comments and suggestions. B. Kim’s research was supported by the National Research Foundation of Korea (NRF) grant funded by the Korea government (MSIP) ( NRF-2017R1A2B4012676 ). J. Kim’s research was supported by Basic Science Research Program through the National Research Foundation of Korea (NRF) funded by the Ministry of Education ( 2017R1D1A1B03029542 ).
© 2019 Elsevier B.V.
- Bayesian Nash equilibrium
- Incomplete information
- War of attrition
ASJC Scopus subject areas
- Management Science and Operations Research
- Industrial and Manufacturing Engineering
- Applied Mathematics