Seminario 14/20 – Luis CORCHON (UC3M): Dynamic Contests with Bankruptcy: The Despair Effect

bankruptcy

Abstract In this paper we analyze a two period contest in which agents may become bankrupt at the end of the first period. A bankrupt agent is excluded from the contest in the second period of the game. We investigate the existence of a subgame perfect equilibrium in pure strategies. We distinguish between a borrowing…