TY  - JOUR
AU  - Bulow,Jeremy
AU  - Klemperer,Paul
TI  - The Generalized War of Attrition
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5872
PY  - 1997
Y2  - January 1997
UR  - http://www.nber.org/papers/w5872
L1  - http://www.nber.org/papers/w5872.pdf
N1  - Author contact info:
Jeremy I. Bulow
Stanford University
Graduate School of Business
Stanford, CA  94305-7298
Tel: 650/723-2160
Fax: 650/725-8916
E-Mail: jbulow@stanford.edu

Paul D. Klemperer
Nuffield College
Oxford University
Oxford OX1 1NF
England
E-Mail: paul.klemperer@economics.ox.ac.uk
AB  - We generalize the War of Attrition model to allow for N + K firms competing for N prizes.  Two special cases are of particular interest.  First, if firms continue to pay their full costs after dropping out (as in a standard-setting context), each firm's exit time is independent both of K and of the actions of other players.  Second, in the limit in which firms pay no costs after dropping out (as in a natural-oligopoly problem), the field is immediately reduced to N + 1 firms.  Furthermore, we have perfect sorting, so it is always the K   1 lowest-value players who drop out in zero time, even though each player's value is private information to the player.  We apply our model to politics, explaining the length of time it takes to collect a winning coalition to pass a bill.
ER  -