Complementarities and Games: New Developments

Xavier Vives

No 4742, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The theory of monotone comparative statics and supermodular games is presented as the appropriate tool to model complementarities. The approach, which has not yet been fully incorporated into the standard toolbox of researchers, makes the analysis intuitive and simple, helps in deriving new results and in casting new light on old ones. The paper takes stock of recent contributions and develops applications to industrial organization (oligopoly, R&D, and dynamics), finance (currency and banking crisis) and macroeconomics (adjustment and menu costs). Particular attention is devoted to Markov games and to games of incomplete information (including global games).

JEL-codes: C61 C62 C72 C73 D83 E22 F32 G21 L13 O31 (search for similar items in EconPapers)
Date: 2004-11
New Economics Papers: this item is included in nep-fin and nep-mac
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Citations: View citations in EconPapers (35)

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