Duplicative search

Alexander Matros*, Vladimir Smirnov

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)

Abstract

In this paper we examine the dynamic search of two rivals looking for a prize of known value that is hidden in an unknown location, modeled as search for treasure on an island. In every period, the players choose how much to search of the previously unsearched portion of the island in a winner-takes-all contest. If the players cannot coordinate so as to avoid searching the same locations, the unique equilibrium involves complete dissipation of rents. On the other hand, if the players have some (even limited) ability to coordinate so as to avoid duplicative search and the search area is sufficiently small, there is a unique equilibrium in which the full area is searched and each player earns a positive expected return.

Original languageEnglish
Pages (from-to)1-22
Number of pages22
JournalGames and Economic Behavior
Volume99
DOIs
Publication statusPublished - 1 Sep 2016
Externally publishedYes

Keywords

  • R&D
  • search
  • duplication
  • uncertainty
  • coordination

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