When to confront: The role of patience

Alvaro Sandroni; Can Urgun

doi:10.1257/mic.20150309

When to confront: The role of patience

Alvaro Sandroni, Can Urgun

Economics

Research output: Contribution to journal › Article › peer-review

2 Scopus citations

Abstract

This paper examines the effects of patience on ordinary conflicts such as divorce, price wars, and commercial litigation. Players optimally decide when, if ever, to start a destructive confrontation. In the unique equilibrium, there is a tight connection between patience, aggressiveness, and strength. In particular, patience may lead to immediate confrontation (the most inefficient outcome). This inefficiency is caused by preemptive moves that deny option values to the opponent.

Original language	English (US)
Pages (from-to)	219-252
Number of pages	34
Journal	American Economic Journal: Microeconomics
Volume	10
Issue number	3
DOIs	https://doi.org/10.1257/mic.20150309
State	Published - Aug 1 2018

All Science Journal Classification (ASJC) codes

General Economics, Econometrics and Finance

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10.1257/mic.20150309

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abstract = "This paper examines the effects of patience on ordinary conflicts such as divorce, price wars, and commercial litigation. Players optimally decide when, if ever, to start a destructive confrontation. In the unique equilibrium, there is a tight connection between patience, aggressiveness, and strength. In particular, patience may lead to immediate confrontation (the most inefficient outcome). This inefficiency is caused by preemptive moves that deny option values to the opponent.",

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AB - This paper examines the effects of patience on ordinary conflicts such as divorce, price wars, and commercial litigation. Players optimally decide when, if ever, to start a destructive confrontation. In the unique equilibrium, there is a tight connection between patience, aggressiveness, and strength. In particular, patience may lead to immediate confrontation (the most inefficient outcome). This inefficiency is caused by preemptive moves that deny option values to the opponent.

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When to confront: The role of patience

Abstract

All Science Journal Classification (ASJC) codes

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