Strategic Behavior in Contests: A Review of Dixit and Subsequent Commentaries

This study revisits the seminal proposition of strategic commitment in contest theory advanced by Avinash Dixit (1987) and provides a comprehensive review of strategic behavior in contests, focusing on the critical subsequent comments by Baik and Shogren (1992, BS) and Baye and Shin (1999, BS). Dixit (1987) expanded the frontiers of contest theory by demonstrating that a favorite has an incentive for strategic overcommitment whereas an underdog opts for undercommitment in asymmetric contexts. However, by endogenizing the order of play, BS (1992) established an “underdog-first, favorite-second” subgame perfect equilibrium, which unexpectedly leads to mutual undercommitment and a substantial reduction in social costs. Concurrently, BS (1999) re-examined symmetric contests to prove that symmetry and monotonicity alone cannot preclude local commitment incentives; rather, the higher-order derivatives and mathematical curvature of the Contest Success Function (CSF) dictate the existence of strategic manipulation by the leader. This paper structurally analyzes the complementary differences in focus and methodology between these two foundational extensions. Furthermore, it traces the theoretical evolution of endogenous timing framework into multilateral settings, asymmetric legal reimbursement rules, and multi-dimensional asymmetries, concluding with pedagogical and methodological suggestions for future empirical and experimental inquiries.