The value of a draw
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We model a match as a recursive zero-sum game with three possible outcomes: Player 1 wins, player 2 wins, or there is a draw. We focus on matches whose point games also have three possible outcomes: Player 1 scores the point, player 2 scores the point, or the point is drawn in which case the point game is repeated. We show that a value of a draw can be attached to each state so that an easily computed stationary equilibrium exists in which players’ strategies can be described as minimax behavior in the point games induced by these values.
KeywordsMatches Stochastic games Recursive games Draws
JEL ClassificationC72 C73
Oscar Volij thanks the Department of Foundations of Economics Analysis I at the University of the Basque Country for its kind hospitality. This paper was partly written during his stay there.
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