Please use this identifier to cite or link to this item:
http://hdl.handle.net/2123/7867
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| Title: | Treasure game |
| Authors: | Matros, Alexander Smirnov, Vladimir School of Economics |
| Keywords: | R&D search uncertainty |
| Issue Date: | Oct-2011 |
| Publisher: | School of Economics |
| Series/Report no.: | 2011-10 |
| Abstract: | A prize is located at an unknown point on an island. In each period, each of n players searches a subset of the as yet unsearched portion of the island. If one player alone finds the prize he wins it and the game ends. Players have a per-period discount factor and a search cost proportional to area searched. Efficient symmetric Markov perfect equilibria are characterized when search is observable. Equilibria for n ≥ 2 exhibit two types of inefficiency: a tragedy of the commons (for small islands) and free riding (for large islands). For n ≥ 3, equilibrium properties are non-monotonic: players may be better off searching larger islands, and larger islands may take less time to search. When search is unobservable and players are sufficiently impatient, multi-player search can be efficient. The model is very general: applications include R&D races, team production, and extraction of exhaustible resources. |
| URI: | http://hdl.handle.net/2123/7867 |
| Department/Unit/Centre: | School of Economics |
| Appears in Collections: | Working Papers - Economics |
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