In some games, the impact of higher-order uncertainty is very large, implying that present economic theories may rely critically on the strong common knowledge assumptions they make. Focusing on normalform games in which the players’ action spaces are compact metric spaces, we show that our key condition, called “global stability under uncertainty,” implies that the maximum change in equilibriu...

We study potential games with continuous player sets, a class of games characterized by an externality symmetry condition arising naturally in models of network congestion. We offer a simple description of equilibria which are locally stable under a broad class of evolutionary dynamics, and prove that behavior converges to equilibrium from all initial conditions. We propose a subclass of potent...

We offer a new perspective on games of irreversible investment under uncertainty in continuous time. The basis is a particular approach to solve the involved stochastic optimal control problems which allows to establish existence and uniqueness of an oligopolistic open loop equilibrium in a very general framework without reliance on any Markovian property. It simultaneously induces quite natura...

We examine contemporaneous perfect ε-equilibria, in which a player’s actions after every history, evaluated at the point of deviation from the equilibrium, must be within ε of a best response. This concept implies, but is stronger than, Radner’s ex ante perfect ε-equilibrium. A strategy profile is a contemporaneous perfect ε-equilibrium of a game if it is a subgame perfect equilibrium in a pert...

In a model of incomplete, heterogeneous information, with externalities and strategic interactions, we analyze the possibility of adaptive learning to act as coordination device. We build on the framework introduced by Angeletos and Pavan (2007) and extend it to a dynamic setting where agents need to learn to coordinate. We analyze conditions under which learning obtains, and show that adaptive...

Recent research developments in common-pool resource models emphasize the importance of links with ecological systems and the presence of non-linearities, thresholds and multiple steady states. In a recent paper Kossioris et al. (2008) develop a methodology for deriving feedback Nash equilibria for non-linear differential games and apply this methodology to a common-pool resource model of a lak...

We model dynamic mechanisms for a global commons. Countries benefit from both consumption and aggregate conservation of an open access resource. A country’s relative value of consumption-to-conservation is privately observed and evolves stochastically. An optimal quota maximizes world welfare subject to being implementable by Perfect Bayesian equilibria. With complete information, the optimal q...

We study the relationship between a player’s lowest equilibrium payoff in a repeated game with imperfect monitoring and this player’s min max payoff in the corresponding one-shot game. We characterize the signal structures under which these two payoffs coincide for any payoff matrix. Under an identifiability assumption, we further show that, if the monitoring structure of an infinitely repeated...

We propose a decision making process meant to mimic human behavior. This process is implemented with computational agents. We use this computational testbed to run simulations of two coordination games, the minimum-effort coordination game and the battle of the sexes game. We find that the computational agents exhibit behavior similar to human subjects from previous experimental work. We then u...