Law Is a Battlefield

The Colonel Blotto Litigation Game

F. E. Guerra-Pujol
University of Central Florida
Orlando, FL 32816, USA

***

Contents

1. Introduction: the strategy of litigation

2. Borel’s model
3. Colonel Blotto model of pre-trial litigation
4. Numerical example
5. Dollar auction analogy
6. Conclusion
7. Acknowledgements
8. Mathematical appendix
9. Bibliography

1. Introduction: the strategy of litigation

In this paper, we model litigation as a series of strategic contests. Building on the work of
Dmitry Kvasov (2007) and Russell Golman and Scott Page (2009), we model pre-trial litigation
as a Colonel Blotto game, i.e. a game of allocative strategic mismatch in which the parties must
allocate scarce time resources to a finite number of contests. (Cf. Kvasov, 2007, pp. 738-740;
Golman & Page, 2009, pp. 279-281.) Although the original version of the Colonel Blotto began
as a game of military strategy (see Gross & Wagner, 1950; cf. Talwalkar, 2012), the strategic
aspects of this game have many possible real-world applications. (See generally Kvasov, 2007.)
Specifically, this game is relevant to any domain in which competitors must allocate scarce
resources to a finite number of contests, including litigation. The remainder of this paper is
organized as follows: Section 2 introduces a simple model of allocative mismatch (the Borel
model). Section 3 then presents our Colonel Blotto model of the litigation game, while Section 4
presents a specific and simple numerical example to illustrate the choice of strategies and the
role of randomness in our model. Next, Section 5 describes litigation as a series of all-pay
auctions. Section 6 concludes.

2. The Borel model

We wish to model litigation as a two-player game consisting of a finite number of fronts. The
simplest way to formalize this model is based on the pioneering work of French mathematician

With apologies to Pat Benatar: https://www.youtube.com/watch?v=IGVZOLV9SPo. An earlier draft of this paper

was titled “Litigation as a dollar auction.”

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Emile Borel, one of the earliest proponents of game theory. [Note: Borel’s formalization of the
Colonel Blotto game is the easiest to understand. For alternative formalizations of blotto games,
see Gross & Wagner (1950), Kovenock & Roberson (2015), and Roberson (2006). In addition,
we present an alternative formalization of Borel’s simple model, based on the work of Golman &
Page (2009), in our mathematical appendix.] Following Borel (1953), then, we can imagine a
simple game in which two players, A and B, must choose three positive numbers x, y, z, the sum
of which is equal is to 1:

𝑥𝐴 + 𝑦𝐴 + 𝑧𝐴 = 1

𝑥𝐵 + 𝑦𝐵 + 𝑧𝐵 = 1

Thus, the resources available to the players in this game are finite, since their positive numbers
cannot exceed 1. Also, in Borel’s model of this game, both players must arrange their numbers x,
y, z in the same determined order: A wins if two of the numbers chosen by him are greater than
the corresponding numbers of player B. (In other words, like litigation, this game consists of a
finite series of individual contests.) Stated formally (Borel, 1953, p. 99), A wins if:

(𝑥𝐵 − 𝑥𝐴 )(𝑦𝐵 − 𝑦𝐴 )(𝑧𝐵 − 𝑧𝐴 ) > 0

Since there is an infinite number of rational numbers between 0 and 1 (see, e.g., Courant &
Robbins, 1996, pp. 63-66), an infinite number of selection strategies are available to the players
in this simple game. Next, given these conditions, Borel’s model illuminates one of the most
interesting properties of this game: any selection strategy can be defeated. By way of example, if
A selects .3, .3, .3 as his three positive numbers, then B can win by choosing, say, the positive
numbers .4, .4, .2. At the same time, if B chooses .4, .4, .2, then A can now win by selecting .45,
.45, .1 as his positive numbers. But that strategy, in turn, can be beaten by B if B chooses .46,
.46, .08, as so on, ad infinitum.

More importantly, Borel was not only the first to notice that any strategy in this simple game can
be defeated. Borel (p. 100) observes, for example, that “no complex manner of play can avoid
loss against an adversary who knows [the other player’s] manner of playing and takes it into
account.” He was also the first to recognize that the best strategy for a player in this game is to
select his numbers at random: “The only advice the mathematician could give, in the absence of
all psychological information, to a player … is that he should so vary his plans that the
probabilities attributed by an outside observer to his different manners of playing shall never be
defined.” (Ibid.) Stated formally, the equilibrium in this simple game is for the players to choose
their strategies randomly.

Thus, the following two features of Borel’s simple model of the Colonel Blotto game make his
simple model especially useful for understanding the dynamics of pretrial litigation: (i) the
intuitive idea of competing players allocating finite resources over a finite number of contests,
and (ii) the counterintuitive idea of players selecting strategies randomly or in unpredictable
fashion. We discuss the relevance of both insights to law further below:

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(i) attorney resources are finite

The Colonel Blotto model of litigation is useful because litigation is a time-consuming and costly
process (ask any lawyer), and both time and money are finite resources. The parties to a case
must thus decide how much to invest in legal expenses, and even if the litigants have deep
pockets or otherwise have unlimited amounts of money to spend on legal fees, their attorneys
will have a finite amount of time available to them. In addition, since litigation proceeds in
stages (e.g. pleadings, motions, discovery, trial, appeal, etc.), and since each macro stage
contains any number of micro or individual contests, the parties and their attorneys must make
strategic choices when deciding how much time and money to allocate to each micro-contest and
macro-stage of the process.

(ii) being unpredictable

The Colonel Blotto game reveals another important (yet counter-intuitive) insight about legal
strategy: it pays to be unpredictable when deciding how much resources to invest during each
stage of the process or when deciding how many fronts within each stage to fight. Generally
speaking, once a party commits time and resources to a particular contest in the litigation game,
the other side may decide to (i) out-spend or otherwise out-do his rival in order to increase his
chances of winning that contest, or (ii) not! Why not? Because litigation is a costly game that, ex
ante, involves an unknown number of separate, overlapping, and nested contests, i.e. contests
within contests and even contests within contests within contests. As a result, there really is no
one pure or optimal strategy in the litigation game; instead, we would expect to find a continuum
of equilibria, as in Colonel Blotto games. [Note: Most game theoretic models of litigation,
however, miss this key insight, since outcome uncertainty is anathema to many game theorists
(especially economists), or in the words of Golman & Page (2009, p. 280), “the clean, precise
comparative statics results that game theorists love are not accessible for Blotto.”]

Moreover, even if the total number of contests were known to the parties ahead of time, some
real-life litigants will have more time and money to spend on litigation than others. But this
information is secret and unverifiable. Thus, when allocating resources to each stage of the
litigation process, the parties are also signaling to each other the relative levels of strength and
weakness, i.e. the amount of time and resources they are willing to invest in a case. But because
this signal is unverifiable, the parties may wish to deceptively signal weakness or strength at a
given stage for purely strategic (i.e. extra-legal) reasons. The Blotto model thus explains the
logic of this strategic signaling. (Of course, what fraction of signaling that occurs in litigation is
strategic, i.e. involving some level of bluffing and deception, is an empirical question.)

In sum, although Borel’s model--as well as the more refined Blotto model we present in the
mathematical appendix--is very simple and, in many respects, unrealistic, since these models
assume the level of resources available to A and B is the same, keeping the model simple reveals
two important insights about litigation.

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3. Colonel Blotto model of litigation

In the standard formulation of the Colonel Blotto game, there are two players, each with T
number of troops, and there are N number of battle fronts or locations where the players must
allocate their troops. (Note: Simple Blotto models usually assume that both players have the
same number of troops and that T >> N, i.e. there are many more available troops than fronts.) In
summary, the players must allocate their troops across all the fronts, and whoever has the most
troops over a greater number of fronts wins. Although the rules of the Colonel Blotto game are
simple, the number of possible strategies grows exponentially the larger T is relative to N.
Moreover, it has been proven mathematically that there is no equilibrium solution in pure
strategies. Instead, the only stable equilibrium in this game is to choose strategies randomly.
Here, we build a simple model of pre-trial litigation based on the Colonel Blotto game. In
summary, our model of the litigation game has the following five parts: players, prize,
fronts/contests, troops/time, and rules.

3.1 players

As in the Borel model (section 2 above), there are two players: plaintiff and defendant, or P and
D, respectively. [Note: We will use the uppercase letter P to designate plaintiff and lowercase p
to designate probability.]

3.2 prize

P and D are competing for a fixed prize of value V. (In this respect, litigation is similar to an
auction. See Section 4 below.) This prize might consist of the allocation of a legal right, e.g.
ownership of a disputed asset or the right to make noise (cf. Coase, 1960, pp. 26-27). For
mathematical simplicity, we assume the prize is indivisible and can only be awarded to one of
the constestants. In reality, a legal contest could result in a positive-sum outcome (i.e. settlement)
or a zero-sum outcome (i.e. trial). Also, for further simplicity, we assume that both players value
the prize identically. (Baye, et al. (1996), by contrast, consider two types of all-pay auctions in a
non-litigation context: (i) auctions where all players value the prize identically, i.e. homogenous
valuations, and (ii) auctions where some players value the prize more than others, or
heterogeneous valuations. Question: does the former assumption (homogenous valuations) rule
out the possibility of a settlement range when the prize is the allocation of a legal right?)

3.3 contests

Litigation contains a large but finite number of legal fronts or legal contests, i.e. N is large. At a
minimum, N = 3, i.e. there are at least three separate contests: (i) pleadings, (ii) pre-trial motions,
and (iii) discovery. In reality, each of these three pre-trial contests or legal fronts will, in turn,
encompass an indeterminate (but finite) number of smaller fronts or battles. During the pleadings
stage, for example, the plaintiff’s complaint may contain multiple legal claims or legal theories
(e.g. common law or statutory claims), and the defendant, in turn, may assert several affirmative
defenses to each claim, so that each individual claim/theory could be modelled as a separate front
or mini-battle. (Note: We could expand our model to also include the trial stage, post-trial
motions, and appeals, but we do not do so here because we want to investigate the reasons why

4
most cases settle out of court. Thus, we focus on the pre-trial stage of litigation and contain our
model to pleadings, pre-trial motions, and discovery.)

3.4 time

Instead of troops, P and D must allocate T units of time to each stage or battle. For simplicity, we
assume T is finite and PT = DT, i.e. the value for T is the same for both players. (In that case, we
could model T as a continuous variable, with T = 1, i.e. each player may allocate between 0 and
1 units of time to a front so long as the total amount of time expended overall does not exceed 1.)

In the alternative, one party’s value for T, i.e. the amount of time available to fight, might be
greater than the other’s T, for example, PT > DT, or PT < DT. (Weinstein, 2012, pp. 7-12, for
example, considers Blotto games where one player has greater available resources than the
other.) Notice that in either of these cases, T could be translated into pecuniary costs. As such,
each player’s decision regarding how much time to expend on each front can then be compared
to a bid in an all-pay auction. Cf. Section 4 below.

3.5 rules

The rules of this litigation game are as follows:

R-1: Each player’s T is private information. Neither player knows ex ante how much time or
resources the opposing player will allocate to each front. In reality, in litigation the parties move
sequentially, and each party can observe the moves of the other. As a result, each party can
estimate or guess the amount of time T the opposing side is spending on his case, and each
party’s strategic decision regarding how much time to expend on each front is in this respect like
a bid in an all-pay auction. (We will explore this analogy further in Section 4 below.)
Nevertheless, the true value of each side’s T is hidden information, at least ex ante.

R-2: The party who allocates a greater amount of time to a front will be declared the winner of
that front, just like the highest bidder in an English auction is the winner of the auction. (In the
alternative, we could assume a linear relation between time T, the amount of time allocated to
each front, and probability p, the probability of winning each front.) In the event of a tie (both
parties allocate the same amount of time to a particular front), the winner of that front is decided
by a coin toss or some other random device.

Note: We are using time as a crude and approximate proxy for the quality of one’s case (e.g. the
quality of one’s evidence, legal arguments, witnesses, etc.).

R-3: Each player wants to maximize the number of fronts he expects to win; i.e. we assume for
simplicity that the strategic values of the fronts are equally weighted. In reality, one front may
carry more weight than the others, but in most cases, it is reasonable to assume that the player
who wins the most individual fronts is the player who is the most likely to win the overall war.
(Note: Weinstein, 2012, distinguishes between two types of Blotto games: (i) plurality Blotto
games, and (ii) majority Blotto games.)

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Given these rules of the game, what is the optimal litigation strategy?

Although the rules of our version of the Colonel Blotto game are simple, the number of possible
strategies grows exponentially the larger T is relative to N. (As an aside, Ahmadinejad, et al.
(2016) use computational methods to solve Blotto games.) Moreover, it has been proven
mathematically that there is no equilibrium solution in pure strategies. (See, e.g., Golman &
Page, 2009.) Instead, the only stable equilibrium in this game is to choose strategies randomly.
Rather than restate this general conclusion, we shall illustrate it with a simple numerical example
below.

4. Numerical example

Here, we illustrate our Colonel Blotto model of litigation with a simple numeral example in
which T = 5 and N = 3. For simplicity, we summarize our pre-trial game in terms of players and
fronts, actions or strategies, and payoffs as follows:

Players and fronts

In this numerical example, there are two players, plaintiff (P) and defendant (D), as before. Also,
the game consists of three “litigation contests” or “litigation fronts” (i.e. N = 3): (i) pleadings, (ii)
motions, and (iii) discovery.

Before proceeding, it is worth noting that N, the number of fronts or contests, can be much
greater than 3; indeed, N might even be unknown. In a real law case, each contest during the pre-
trial phase may, in turn, contain a larger and indeterminate number of smaller fronts or mini-
battles. For example, during the discovery phase of litigation, each deposition or request for
production of documents could be modelled as a separate battle or contest. In addition, these
fronts and contests may overlap to some extent. Nevertheless, we shall keep our example simple
for mathematical tractability.

Actions and strategies

In the standard version of the Colonel Blotto game, each player must allocate a limited number
of troops or resources to a finite number of battlefields. Likewise, in our litigation version of the
game, each party must expend a finite number of units of time across three separate but
overlapping pre-trial contests: pleadings, motions, and discovery. Here, for simplicity, we
assume that both players have five discrete and indivisible units of time available (i.e. T = 5) and
that each player must allocate at least one unit of time to each front.

Payoffs

In the standard version of the Colonel Blotto game, players win a given battlefield when they
allocate more troops than their opponent, and the player who wins the most battlefields is the one
who wins the game. Similarly, we assume that the party who allocates the most units of time to
each phase of litigation will eventually “win” that phase.

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Although this is a crude and imperfect approximation, we are justified in using time as a
predictor to the extent the quality of the parties’ arguments and the quality of the evidence they
are able to discover are a function of the time expended on these activities, i.e. on developing
good arguments and discovering useful evidence. That is, it is reasonable to assume that the
more time a party spends on any given contest (e.g. preparing his pleadings, researching his
motions, or engaging in discovery), the more likely it is that party will outperform the other side.

Visualization of the model

Given our simplifying assumptions, we may visualize the numerical example of our model as
follows:

Pleadings

PLAINTIFF Motions DEFENDANT

Discovery

Note: Where N = number of fronts = 3, and T = number of troops per player = 5.

***

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Payoff table

In addition, since each party has a total of five units of time available in this numerical example,
and since they must expend at least one unit of time on each contest, the following payoff table
summarizes all possible strategy combinations in this numerical example of our model:

P, D (2, 2, 1) (2, 1, 2) (1, 2, 2) (3, 1, 1) (1, 3, 1) (1, 1, 3)

(2, 2, 1) 0 0 0 0 0 -1, +1

(2, 1, 2) 0 0 0 0 -1, +1 0

(1, 2, 2) 0 0 0 -1, +1 0 0

(3, 1, 1) 0 0 +1, -1 0 0 0

(1, 3, 1) 0 +1, -1 0 0 0 0

(1, 1, 3) +1, -1 0 0 0 0 0

Notes:

Players

 Row = plaintiff
 Column = defendant

Strategies

 Row/plaintiff’s strategies are listed on top row

 Column/defendant’s strategies are listed on left column

Payoffs

 0 = tie
 +1, -1 = win for plaintiff and loss for defendant
 -1, +1 = loss for plaintiff and win for defendant

***

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Optimal strategies

This simple numerical example generates a revealing insight about litigation strategy: ***

In this simple version of our Blotto litigation game, most combinations of strategies generate a
zero payoff. Specifically, when plaintiff allocates more time to one front, while defendant
allocates more time to another front, with both parties allocating the same amount of time to the
third front, then these strategy combinations result in draws. [Note to self: might this result
explain why both sides might prefer going to trial over settlement?]

At the same time, three combinations produce a positive payoff to plaintiff, while another three
strategy combinations produce a positive payoff to defendant. But when allocations of time are
hidden or only partially observable (i.e. when both parties’ actions are overlapping or when both
move simultaneously), there is no one “best response” or Nash equilibrium. Instead, the optimal
strategy for each party to play the strategies (2, 2, 1), (2, 1, 2), and (1, 2, 2) each with probability
1/3.

Although this particular numerical example of our model is very simple and artificial, it reveals
an important insight about litigation strategy: the role of randomness in law. That is, depending
on the rules of the game and the amount of time and resources available to both parties,
randomness might be a feature of effective litigation strategy. [Note analogy to bluffing in poker.
See Guerra-Pujol, 2015]

5. Litigation as a dollar auction

Modelling litigation as a Colonel Blotto game reveals another insight about litigation strategy:
the danger of costly and wasteful escalation during each phase of the game. Recall our previous
assumption: in a Colonel Blotto game, the party who allocates the most time or resources to a
given front is the party who is most likely to “win” that front. Given this assumption, each phase
of litigation can be modelled as an “all-pay auction” because once a party has expended time and
resources to a given front, that litigation expenditure becomes a sunk cost. The parties are unable
to recover those resources or reallocate them to a different front.

Specifically, our Colonel Blotto model shows how the logic of auctions might apply to litigation.
Previous literature has applied an auction framework to the logic of litigation expenditures.
Baye, et al. (2005), for example, use an auction-theoretic framework to predict the relative levels
of litigation expenditures under the American system in which all litigants pay their own legal
expenses and under the British system in which the loser pays his own legal costs and reimburses
the winner for all of his costs. Their auction framework, however, assumes away the temporal
dimension of litigation, i.e. litigation as a series of discrete contests. As a result, their framework
assumes away many of the strategic choices litigators must make during the pre-trial phase of
litigation.

By contrast, our Colonel Blotto model shows how litigation is a series of all-pay auctions, i.e.
how each litigation contest or litigation front is a separate all-pay auction. Stated formally, an all-
pay auction is a zero sum contest with n players or bidders competing for a prize. (In our model

9
of litigation, n = 2, i.e. the contestants are plaintiff and defendant, while the prize might consist
of the award of monetary damages or more generally the allocation of a legal right.)
Furthermore, in an all-pay auction, all players are required to pay their bids, but the prize only
goes to the player who makes the highest bid or who puts forth the greatest effort.

One variant of this all-pay type of auction is a paradoxical game called the “dollar auction.”
Economist Martin Shubik introduced the dollar auction in a short paper published in 1971 in The
Journal of Conflict Resolution (Poundstone, 1992, pp. 260-262). In the original version of
Shubik’s game, an auctioneer or banker auctions off a dollar bill (or other fixed prize) to the
highest bidder, but both the highest bidder and the second-highest bidder are required to pay their
respective bids to the auctioneer/banker (Shubik, 1971, p. 109). In other words, the dollar auction
game is not only a winner-take-all contest; in addition, the loser must relinquish the amount of
his losing bid. According to most accounts, the dollar auction often produces escalating bids
(see, e.g., Murnighan, 1991, ch. 7), and bidders in dollar auctions often end up bidding far more
than a dollar or more than the amount being auctioned.

Furthermore, the dollar auction is not just a “parlor game” (Shubik, 1971, p. 109), an outlier in
the pantheon of formal game theory models. Since its introduction in 1971, scholars working in
different fields have discovered real-life dollar auctions in a wide variety of settings
(Poundstone, 1992, pp. 262-266; Teger, 1980), including mergers and acquisitions (Murnighan,
2002, p. 65), free agency in sports (ibid., p. 66), the film industry (Thaler, 2009), arms races and
patent races (Costanza, 1987, pp. 411-412; Leininger, 1989, p. 233), international conflict
(O’Neill, 1986, pp. 43-44), and even romance (Murnighan, 1991, pp. 67-68). To this list of real-
world applications of the dollar auction, we would add civil litigation. Although some
commentators have remarked in passing on the possible parallels between civil litigation and the
dollar auction game (see, e.g., Bowles, 1987, p. 178; Noll, 2000), in this section, we explore the
connection between litigation and the dollar auction in greater detail.

As before, by maintaining our focus on the pre-trial stage of civil litigation (see, e.g., Melvin &
Guerra-Pujol, in press), we are able to highlight the following three major similarities between
the dollar auction and our Colonel Blotto model of pre-trial litigation:

 The plaintiff is bidding for x, where x is the right to go to trial, by investing time and
resources in pleadings, motions, and discovery, and likewise, the defendant is bidding for
~x (“not x”) during each one of these phases (pleadings, motions, and discovery).

 The judge or magistrate plays the role of the auctioneer: he decides whether the case goes
to trial (x or ~x), and his decision will be influenced by the legal expenditures (i.e. bids)
of the parties.

 Regardless of the outcome of the case, both parties must pay the costs of their bids,
except in those cases where fee-shifting is permitted or authorized by law. (Cf. Baye, et
al., 2005, who consider the effect on fee-shifting on legal expenditures.)

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Analytically, each phase of pre-trial litigation is like a dollar auction for several reasons: (i)
because legal battles are generally zero-sum or even negative-sum contests, unless the parties are
able to settle out of court; (ii) because the parties’ expenditures of time and resources during each
stage of the litigation process can be thought of as bids; and (iii) because there is no formal fixed
point or equilibrium solution. We consider each of these attributes of pre-trial litigation below:

Litigation as a zero sum game

Broadly speaking, absent pre-trial settlement, legal battles do not produce mutually beneficial
outcomes or create new wealth; they merely transfer or rearrange existing wealth between the
parties, since a win for the plaintiff comes at the defendant’s expense, while a win for the
defendant occurs at the plaintiff’s expense. Thus, like Shubik’s dollar auction game in which two
or more bidders compete for a fixed prize (Shubik, 1971, p. 109), litigation is at best a zero sum
contest. (In fact, because litigation is costly and because litigation outcomes are often uncertain,
a civil lawsuit can potentially become a negative sum game, depending on the level of risk
aversion of the parties. Cf. Viscusi, 1988, pp. 105-106, who considers the effect of risk aversion
on litigation.) This insight might explain why such a large proportion of cases settle out of court,
i.e. why most parties refuse to play this game.

Equivalence between bets and bids

Although the court (trial judge or magistrate) does not conduct an auction in a literal sense,
during the pre-trial stage the judge or magistrate gets to decide whether the case will go trial or
not, and like a real auction, the plaintiff wins the pre-trial game if the case goes to trial, while the
defendant wins if the case is dismissed, in whole or even in part. At the same time, pre-trial
litigation is costly. During the pre-trial phase, the parties must prepare pleadings, submit motions
to the court, and engage in discovery, and the parties must thus incur escalating costs and legal
fees during the pre-trial phase as they attempt to persuade the judge/magistrate to rule in their
favor.

As a result, because litigation is costly, the litigation investments of the parties can be compared
to bids. Specifically, at the pre-trial stage both parties to a civil lawsuit--the plaintiff and the
defendant--make bids indirectly or by proxy by preparing pleadings (e.g. the complaint and the
answer to the complaint), submitting motions (e.g. motion for dismissal and summary judgment
or to compel discovery), and engaging in discovery (e.g. depositions, interrogatories, and
production of documents). The parties’ spending decisions or “litigation investment decisions”
(cf. Johnson, 1980) are thus the equivalent of bids. In reality, these bids are more like bets (cf.
Guerra-Pujol, 2015), since it is the judge or magistrate who decides who the winner is (i.e.
whether the case goes to trial) and since this decision is not supposed to be a direct function of
each side’s litigation investment.

Nevertheless, a litigation bet can be likened to a bid in an auction. Essentially, the parties to a
case are “bidding” on the outcome to the extent they are incurring costs and legal fees during the
pre-trial stage. Furthermore, both the plaintiff and the defendant are both required to pay their
bids, regardless of the outcome of the case. Under the so-called American rule of civil litigation
(in contrast to the English rule, in which the loser must the attorney fees of the winning side),

11
each side to a lawsuit must pay its own attorney fees. Although some state and federal statutes
allow the winner to recover attorney fees in some cases (see, e.g., the Magnuson-Moss Warranty
Act, Public Law 93-637, codified at 15 U.S. Code, sec. 2310(d)(2)), fee-shifting is still the
exception and not the general rule.

Emotional equilibria

Like the Colonel Blotto game, the original dollar auction game has no formal or mathematical
solution. (Cf. Shubik, 1971, p. 111: “The game theory analysis of the game in extensive form
shows us that the game theory model alone does not appear to be adequate.”) Although most
formal models studied by game theorists have mathematical or formal solutions (such as the
Prisoner’s Dilemma), the dollar auction, by contrast, “appears to depend upon virtually only the
social-psychology of the players, or other unstated factors” (ibid.). In some situations, negative
emotions can spiral out of control and crowd out rational behavior altogether (see, e.g.,
Murnighan, 2002, pp. 63-64. See also Thaler, 2009).

In the alternative, one can argue that escalation (either in the dollar auction or in civil litigation)
is a rational strategy from a normative perspective if the goal of the players is to develop a
reputation for “winning at all costs.” But even if the notion of reputation effects makes escalation
a rational strategy to play in the dollar auction, the dollar auction has no definite equilibrium or
fixed point solution. Instead, emotional and other psychological factors (i.e. factors external to
the game itself) can lead to costly and irrational escalation, making the outcome of the dollar
auction (when will the escalation stop?) unpredictable, unstable, and uncertain. (If, however, the
bidders in the dollar auction game were allowed to negotiate with each other, we predict that
winning bids would be lower on average.)

Differences between the dollar auction and the Blotto model

Thus far, we have considered several similarities between Shubik’s dollar auction and our
Colonel Blotto model of pre-trial litigation. Here, we consider some important differences
between these two approaches.

One difference is the level of interaction between the players in both games. In most versions of
the dollar auction, the bidders are unable to make threats or credible commitments and are not
allowed to negotiate directly with each other or form coalitions, or in the words of Shubik (1971,
p. 109): “The only communication is the bid, and the only signals are the history of bidding in
the auction.” In civil litigation, by contrast, informal settlement negotiations are common, i.e. the
parties can opt out of the litigation game/legal dollar auction at any time. In fact, the parties are
not only free to engage in settlement talks; they are often required to do so by the courts. In
addition, the retention of experts and the payment of retainer fees can serve as pre-commitment
devices.

Another difference between the dollar auction and Blotto model is the potential multiplicity of
fronts or contests in real-life Colonel Blotto games. A dollar auction is a single winner-take-all
contest, and a player’s only decision is whether to increase his bid in order to stay in the auction.
A Colonel Blotto game, by contrast, consists of a series of contests. In addition, the number of

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fronts or contests is not fixed ahead of time, and a player always has the option of opening a new
front. In fact, it might often be to the advantage of one of the players to increase the number of
fronts to force the opposing side to invest additional time and resources in the game ***

Nevertheless, despite these significant differences, when the parties are unable to settle out of
court, we often see the same pattern of reckless and costly escalation in litigation that we see in
dollar auctions. One possible reason for this pattern of escalation is the Blotto-like aspects of
civil litigation. In sum, each major phase is a separate dollar auction, these phases are not
completely separate from each other, and the parties’ expenditures or bids during each phase are
not completely hidden. Instead, the parties are moving sequentially and can respond to each
other’s moves during each phase.

6. Conclusion

Although our Colonel Blotto model of the litigation game doesn’t break any new theoretical
ground, since the results of our model are based on previous work by Borel & Ville (1938) and
Gross & Wagner (1950), our application of this simple model to litigation is novel and
potentially useful--novel because our model reconceptualizes litigation as a series of all-pay
auctions and useful because our model highlights the role of strategic decision-making during the
pre-trial phase of litigation.

Our strategic model, however, has severe limitations. In particular, some of our simplifying
assumptions are unrealistic or may not always hold true, such as our randomness assumption
regarding ties or our overly-deterministic or “winner-take-all” assumption that the party who has
allocated the most time and resources to a given contest will be declared the winner of that
contest. (In the words of Golman & Page (2006, p. 14): “Unfortunately, most real world games
usually do not fit into the rigid structure of Colonel Blotto.”) Moreover, in some situations, a
party’s strategic objective might be “to win one front by as much as possible, rather than to win
as many fronts as possible.” (Golman & Page, 2006, p. 18.) Nevertheless, rather than discarding
our strategic approach to litigation, in future work we will consider refining our model by taking
into account the margin of victory in each contest and by making the model more probabilistic
and less deterministic.

7. Acknowledgements

A previous draft of this paper benefited from discussions with Raul Alvarez. In addition, I am
grateful for the opportunity to present this paper at the 62nd Annual Meeting of the Southeastern
Academy of Legal Studies (SEALSB) in Durham, N.C. Also, I wish to thank Scott Page for
introducing me to the Colonel Blotto model and Presh Talwalkar for his helpful visualization of
the Colonel Blotto game. Lastly, I must acknowledge the general influence of my intellectual
mentor Thomas Schelling on my strategic approach to law.

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8. Mathematical appendix

In the Borel model of the Colonel Blotto game (see section 2 above), the players must choose
three positive numbers whose sum is equal is to some predetermined value. Alternatively,
following Golman & Page (2009, pp. 283-284), we can describe this game more generally by
defining the strategy sets of A and B as real vectors, i.e. vectors whose elements consist of the
real numbers (A1, A2, … Am) for player A and (B1, B2, … Bm) for player B. Next, we use the
notation Ai to represent the fraction of Player A’s budget allocated to front i, Bi to represent the
fraction of player B’s budget allocated to front i, and m to represent the total number of fronts.
Accordingly, player A’s strategy set can thus be stated formally as follows:
𝑚

∑ 𝐴𝑖 = 1, 𝐴𝑖 ∈ [0, 1]
𝑖=1

Similarly, Player B’s strategy set is as follows:

𝑚

∑ 𝐵𝑖 = 1, 𝐵𝑖 ∈ [0, 1]
𝑖=1

In words, the players in this formulation of the model have same available budget (A i = Bi = 1);
they must allocate some fraction of their respective budgets (between the value of 0 and 1) to
each front i; and they compete against each other in a space consisting of m fronts. (Note: For
simplicity, we assume m = 3, but m can be large. Cf. Gross & Wagner, 1950.) Since the strategy
sets of A and B are real vectors (vectors consisting of real numbers), we can use the sign
function (signum or “sgn”) to express the payoffs of this game. [Note: We are using the sign
function “sgn” to measure the payoffs to A and B because we do not care about the margin of
victory on each front; instead, we only care about the relative investment levels of A and B on
each front.] Stated formally:
𝑚

∑ sgn(𝐴𝑖 − 𝐵𝑖 )
𝑖=1

where sgn(V) = +1, 0, or -1 depending on the sign (+ or –) of each (Ai – Bi) per m as follows:

For player A:

+1, if V > 0

0, if V = 0

–1, if V < 0

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And for player B:

–1, if V > 0

0, if V = 0

+1, if V < 0

Again, in words, each player’s payoff equals the number of contests won minus the number of
contests lost. (Recall there are m number of contests or fronts.) Since a given contest or front is
won by the player who allocates a greater level of resources to that contest, the outcome of the
game depends on the relative levels of resources the players allocate over the total number of
separate contests/fronts. But at the same time, any pure strategy regarding the allocation of
resources can be defeated. Specifically, a pure strategy * that allocates resources to the ith front
(*i > 0) will lose to a competing strategy ** that allocates no resources to the ith front and instead
allocates its resources to the remaining fronts (Golman & Page, 2009, p. 284). Stated formally:
∗𝑖
∗∗𝑖 = 0, ∗∗𝑗 = ∗𝑗 + for all 𝑗 ≠ 𝑖
𝑚−1

For example, if A plays strategy *, while B plays strategy **, then:

𝐴𝑖
𝐵𝑖 = 0, 𝐵𝑗 = 𝐴𝑗 + for all 𝑗 ≠ 𝑖
𝑚−1

That is, if A allocates any available resources to the ith front (Ai > 0), A will always lose to B if
B allocates no resources to the ith front (Bi = 0) and instead allocates his available resources to
all other fronts. (Golman & Page, 2009, p. 284.) As a result, no deterministic or pure strategy can
guarantee a win in this game. Instead, the best the players can do at equilibrium is to allocate
2
between 0 and 𝑚 level of resources to any given contest or front. (Ibid.) But, in plain speak,
why is the optimal allocation per contest anywhere between this particular range, i.e. the range of
2
0 and ? On one end, it is 0 because this allocation gives each player the strategic ability to
𝑚
2
free up his finite resources for fighting other fronts, and on the other end of the range, it is 𝑚
because this limit prevents the players form overinvesting their finite resources in a single front
(i.e. because no player wants to put all his eggs in one basket, so to speak).

15
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Miscellaneous

Date of this draft: 12 December 2016

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