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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.|
|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|
|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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