Two players, A and B, engage in a war of attrition. Each player picks a concession time. Action tA is the concession time for A and action tB is the concession time for B. The war will be over when a player first concedes. The payoff functions below show that the player with a higher concession time wins. The longer the war lasts, the higher the cost is for both players. Carefully examine the payoff functions and answer the questions below.

The payoff for A is given by

uA(tA, tB) = −tA if tA < tB

= 4/ 2 − tA if tA = tB

= 4 − tB if tA > tB

The payoff for B is given by uA(tA, tB) = −tB if tA > tB

= 6/ 2 − tB if tA = tB

= 6 − tA if tA < tB

Find the best response function for A. Find all the Nash equilibria.

Answer rating: 100% (QA)

The best response function for A is given by uAtA tB tA if tA tB 2 2 tA if tA tB 2 tB if tA tB The Nash equilibria are given by tA tB 4 2 6 2 6 2 4 2 ... View the full answer