Endogenous Heterogeneity in Strategic Models: Symmetry-breaking via Strategic Substitutes and Nonconcavities

Endogenous Heterogeneity in Strategic Models : Symmetry-breaking via Strategic Substitutes and Nonconcavities

This paper is an attempt to develop a unified approach to endogenous heterogeneity by constructing general class of two-player symmetric games that always possess only asymmetric pure-strategy Nash equilibria. These classes of games are characterized in some abstract sense by two general properties: payoff non-concavities and some form of strategic substitutability. We provide a detailed discus...

Strategic Substitutes and Potential Games

We show that games of strategic substitutes (or complements) with aggregation are “pseudo-potential” games, and therefore possess Nash equilibria in pure strategies. Our notion of aggregation is quite general and enables us to take a unified view of several disparate models. JEL Classification Numbers: C 72, D 43, L 13.

Information complements, substitutes, and strategic product design

Endogenous Strategic Business Cycles

This paper examines an overlapping generations version of the Shapley-Shubik market game. We show existence of equilibria for the simple one commodity model and analyze the dynamics of the equilibrium trajectories generated in the model. Because of the non-linearities generated by strategic interaction of agents in the model, we find that complex and chaotic equilibrium dynamics are possible in...

Strategic Commitment and Cooperation in Experimental Games of Strategic Complements and Substitutes *

We study the impact of strategic commitment on cooperation in indefinitely repeated games of strategic substitutes (Cournot) and complements (Bertrand) using laboratory experiments. Overall, strategic commitment has no effect on cooperation with strategic substitutes and a negative one with strategic complements. In the absence of strong strategic commitment, we find more cooperation in the com...