Aggressive and Peaceful Behaviour in Contests - The Evolution of Strategies in a Dynamic Game

Departing from Hirshleifer (1995),we analyse a dynamic contest situation by means of evolutionary simulations. The dynamic link in the model consists in that the resource input in one period of the contest determines the players’ endowments in the next period. In this setting,we pursue questions like “Is the situation stable?”, “How do the strategies evolve over time?”,“What is the level of resources devoted to fighting once a steady state has been reached?” In the case of stable dynamic contests our results are in line with the steady state-analysis of Hirshleifer. However, in instable variants of the game, we find situations that are characterised by relatively peaceful behaviour in the long run. This is because those players who were aggressive in the beginning reduce their fighting activity once they have accumulated a certain amount of resources, and later become imitated by other players.

Boeters, Stefan and Bettina Müller (2004), Aggressive and Peaceful Behaviour in Contests - The Evolution of Strategies in a Dynamic Game, RWI: Mitteilungen Quarterly 54/55 , 195-215