A Model of Rivalries With Endogenous Prize and Strength
This paper extends Beviá and Corchón (2013) to a model with both endogenous contestable prize and endogenous relative strength. Such a setting is ideal for the study of intra-organizational rivalries, commonly observed in family, sports, promotion, and duopoly. We find that when the game starts with asymmetric players, the weaker player exerts more effort than the stronger player. As a result, the weaker player partially overcomes the disadvantage of being weak. In this setting, neither domino nor avalanche effect exists.
Luo, Zijun; and Xie, Xin. 2018. A Model of Rivalries With Endogenous Prize and Strength. Journal of Economic Behavior and Organization. Vol.152 215-223. https://doi.org/10.1016/j.jebo.2018.06.013 ISSN: 0167-2681