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Appendix

A Proofs

A.1 Proof of Lemma 1

Suppose that $\frac{\partial P_i(e_i, e_k)}{\partial e_i}|{e_i=e_k=e}$ is the same for both $i \in {1,2}$ and all $e \in \text{int } E$. Then we have $\frac{\partial P_1(e_1, e_2)}{\partial e_1}|{e_1=e_2=e} V - c'(e) = \frac{\partial P_2(e_2, e_1)}{\partial e_2}|{e_1=e_2=e} V - c'(e)$ for all $e \in \text{int } E$. Since $\pi_i(e_i, e_k)$ is continuously differentiable, $\frac{\partial P_i(e_i, e_k)}{\partial e_i}|{e_i=e_k=e} V - c'(e)$ is a continuous function of $e$. Furthermore, recall that there exist $\bar{e}_i, \tilde{e}i \in \text{int } E$ such that $\frac{\partial \pi_i(e_i, e_k)}{\partial e_i}|{e_i=e_k=\bar{e}i} < 0$ and $\frac{\partial \pi_i(e_i, e_k)}{\partial e_i}|_{e_i=e_k=\tilde{e}_i} > 0$. Hence, by the Intermediate Value Theorem, there is some $e^* \in \text{int } E$ such that $\frac{\partial P_i(e_i, e_k)}{\partial e_i}|{e_i=e_k=e^*} V - c'(e^*) = 0$. By Assumption 1, $e_1 = e_2 = e^*$ is a Nash equilibrium.

A.2 Proof of Theorem 1

Since we wish to apply the sufficient condition from Lemma 1, we restrict attention to $e_i > 0$. Then, the function $g_e : \mathbb{R} \to \mathbb{R}$ defined by $g_e(x) = g(x,e)$ is strictly increasing and, thus, invertible. The inverse, $g_e^{-1}$, is strictly increasing as well. For the two (different) players $i,k \in {1,2}$, we observe

g(θi,ei)<g(θk,ek)gei(θi)<gek(θk)θi<gei1(gek(θk)). \begin{align*} & g(\theta_i, e_i) < g(\theta_k, e_k) \\ \Leftrightarrow & g_{e_i}(\theta_i) < g_{e_k}(\theta_k) \\ \Leftrightarrow & \theta_i < g_{e_i}^{-1}(g_{e_k}(\theta_k)). \end{align*}

Player k thus wins with probability

Fi(gei1(gek(x)))fk(x)dx. \int F_i(g_{e_i}^{-1}(g_{e_k}(x))) f_k(x) dx.

Differentiating with respect to $e_k$, we obtain

fi(gei1(gek(x)))(ddekgei1(gek(x)))fk(x)dx. \int f_i(g_{e_i}^{-1}(g_{e_k}(x))) \left( \frac{d}{de_k} g_{e_i}^{-1}(g_{e_k}(x)) \right) f_k(x) dx.

According to Lemma 1, and noting that $g_{e_k}^{-1}(g_{e_i}(x)) = g_{e_i}^{-1}(g_{e_k}(x)) = x$ if $e_i = e_k$, a sufficient condition for a symmetric equilibrium to exist is that

(dde1ge21(ge1(x))e1=e2=ef1(x)f2(x)dx=dde2ge11(ge2(x))e1=e2=ef1(x)f2(x)dx \begin{align*} & \int \left( \left. \frac{d}{de_1} g_{e_2}^{-1}(g_{e_1}(x)) \right|_{e_1=e_2=e} f_1(x) f_2(x) dx \right. \\ & = \int \left. \left. \frac{d}{de_2} g_{e_1}^{-1}(g_{e_2}(x)) \right|_{e_1=e_2=e} f_1(x) f_2(x) dx \right. \end{align*}