Volunteering and the Strategic Value of Ignorance



t = -Cl In (1 pL) and FiL (t) = 1, that is, iL concedes with probability one before
tT. Indeed, waiting until T would lead to a payoff lower than V — cl. Since
any symmetric equilibrium must be in mixed strategies, this is the only symmetric
equilibrium. Expected payoff of
iL is V — cl, and expected payoff of iH is

Pl


[t (v

Jo


1 -ɪ     _JL

x)----e cl dx + e cl

PlCl


(” T H)


= V — Cl + exp


Cl


cH+f - t)∙


Hence, the ex ante expected payoff is

E (πi)


= vcl + pH exP ^-(cl--^^ + t


t).


Inserting t leads to (8).

A.5 Proof of Lemma 5

(i) Suppose that T < c2. Together with (3) and (5),

v= -pLcL — pH f— + t ) + 5+ t = -pL~χ- + (1 pH ) t0.
∖ 2      2    2                2

If T > c2, expected payoff is V c in case (^ Λr) which is the payoff an informed
individual
i can ensure by conceding immediately for both possible contribution costs.
Since for a high contribution cost,
i strictly prefers waiting until T, his payoff must
be strictly higher. Thus,
j ^ > 0 for all T (cl2,ch2).

(ii) If T cl2 — cl InpH, subtracting the first row in (4) from the first row in (8)
leads to

v/ (T) = cl ɪ (ch cl) e2 cl + pH+ t) .
2                               ∖ 2      /

(14)


31



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