War of Attrition: Evidence from a Laboratory Experiment on Market Exit

Authors

Ryan Oprea
Bart J. Wilson, Chapman UniversityFollow
Arthur Zillante

Document Type

Article

Publication Date

10-2013

Abstract

We report an experiment designed to study whether inefficient firms are systematically driven from overcrowded markets. Our data set includes a series of 3,800 wars of attrition of a type modeled by Fudenberg and Tirole in 1986. We find that exit tends to be efficient and exit times conform surprisingly well to point predictions of the model. Moreover, subjects respond similarly to implementations framed in terms of losses as they do to those framed in terms of gains.

Comments

This article was originally published in Economic Inquiry, volume 51, issue 4, in 2013.

The link above is to the authoritative publisher’s version, as noted by the Economic Science Institute, and may reside behind a paywall. If denied access, Chapman students, faculty, and staff should try this link.

Recommended Citation

Oprea, R., Wilson, B., and Zillante, A. “War of Attrition: Evidence from a Laboratory Experiment on Market Exit,” Economic Inquiry, 51(4), October, 2013.

Peer Reviewed

1

Copyright

Wiley