Increasing Dominance With No E ± ciency E ® ect Lu

  title={Increasing Dominance With No E ± ciency E ® ect Lu},
  author={Lu¶3s M B Cabral},
I uncover a new force towards increasing dominance (the property whereby, in dynamic games, the leader tends to increase her lead in expected terms). The new e®ect results from the strategic choice of covariance in races. I assume that players must choose not the amount of resources to spend but how to allocate those resources. I show that the laggard has an incentive to chose a di®erent path from the leader. In equilibrium, this results in the laggard choosing a less promising path, in e®ect… CONTINUE READING

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