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When to confront: The role of patience

Author(s): Sandroni, A; Urgun, Can

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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.
Publication Date: Aug-2018
Citation: Sandroni, A, Urgun, C. (2018). When to confront: The role of patience. American Economic Journal: Microeconomics, 10 (3), 219 - 252. doi:10.1257/mic.20150309
DOI: doi:10.1257/mic.20150309
ISSN: 1945-7669
EISSN: 1945-7685
Pages: 219 - 252
Type of Material: Journal Article
Journal/Proceeding Title: American Economic Journal: Microeconomics
Version: Final published version. Article is made available in OAR by the publisher's permission or policy.

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