Choosing fair lotteries to defeat the competition

Journal Article (Journal Article)

We study the following game: each agent i chooses a lottery over nonnegative numbers whose expectation is equal to his budget b . The agent with the highest realized outcome wins (and agents only care about winning). This game is motivated by various real-world settings where agents each choose a gamble and the primary goal is to come out ahead. Such settings include patent races, stock market competitions, and R&D tournaments. We show that there is a unique symmetric equilibrium when budgets are equal. We proceed to study and solve extensions, including settings where agents choose their budgets (at a cost) and where budgets are private information. © 2011 Springer-Verlag. i

Full Text

Duke Authors

Cited Authors

  • Wagman, L; Conitzer, V

Published Date

  • February 1, 2012

Published In

Volume / Issue

  • 41 / 1

Start / End Page

  • 91 - 129

International Standard Serial Number (ISSN)

  • 0020-7276

Digital Object Identifier (DOI)

  • 10.1007/s00182-011-0275-9

Citation Source

  • Scopus