In many competitive environments, players need to commit either to a specific goal they will reach at any cost or to the resources they are willing to spend in pursuit of that goal. We model this situation as a two-stage game where players may compete either by setting input and letting their...

Strategic trade theory has been criticized on the grounds that its predictions are overly sensitive to modeling assumptions. For example, Eaton and Grossman (1986) show that Brander and Spencer's (1985) seminal result - i.e., when firms compete by setting quantities the optimal policy involves...