To Fight or Not to Fight? An Analysis of Submission, Struggle, and the Design of Contests.

This paper considers the players' behavior in an asymmetric two-player contest. When do they decide to struggle and when to subjugate? Analyzing contest-success functions it is found that two crucial prerequisites for struggle or war have to be met. Thus, such an equilibrium is possible but restrictive. If a self-interested rule-setter chooses the contest-success function endogenously, the authors show that one player will always subjugate. Applications to rent-seeking and environmental regulation are discussed. Copyright 1996 by Kluwer Academic Publishers