Feints

In both economic and military situations, agents may try to mislead rivals about their true types or plans, whatever they may be. We consider a simple model in which one player attacks and the other player defends. We show that such environments have two types of possible equilibrium behavior, depen...

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Bibliographic Details
Published in:Journal of economics & management strategy 2006-06, Vol.15 (2), p.431-456
Main Authors: Hendricks, Kenneth, McAfee, R. Preston
Format: Article
Language:English
Subjects:
Business studies
Comparative studies
Economic models
Game theory
Individual behaviour
Investment
Market
Strategic planning
Technology
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Summary:In both economic and military situations, agents may try to mislead rivals about their true types or plans, whatever they may be. We consider a simple model in which one player attacks and the other player defends. We show that such environments have two types of possible equilibrium behavior, depending upon the signaling technology. If the signal is not very revealing about the attacker's plans, then the attacker always invests more resources in attack than in misdirection. If the technology is revealing, then the attacker does not always feint, but when he feints, he invests more than half of his resources into misdirection. Comparative statics also depend on whether the technology is revealing. “Always mystify, mislead and surprise the enemy, if possible.” —General Thomas J. “Stonewall” Jackson “Create havoc in the east and strike in the west.” —Sun Tze
ISSN:1058-6407
1530-9134
DOI:10.1111/j.1530-9134.2006.00106.x