Document Type

Article

Publication Date

2021

Abstract

Success in adversarial environments often requires investment into additional resources in order to improve one’s competitive position. But, can intentionally decreasing one’s own competitiveness ever provide strategic benefits in such settings? In this paper, we focus on characterizing the role of “concessions” as a component of strategic decision making. Specifically, we investigate whether a player can gain an advantage by either conceding budgetary resources or conceding valuable prizes to an opponent. While one might na¨ıvely assume that the player cannot, our work demonstrates that – perhaps surprisingly – concessions do offer strategic benefits when made correctly. In the context of General Lotto games, we first show that neither budgetary concessions nor value concessions can be advantageous to either player in a 1-vs.-1 scenario. However, in settings where two players compete against a common adversary, we find opportunities for one of the two players to improve her payoff by conceding a prize to the adversary. We provide a set of sufficient conditions under which such concessions exist.

Comments

ESI Working Paper 21-24

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