Pareto-undominated and socially-maximal equilibria in non-atomic games

Haifeng Fu and Haomiao Yu

Journal of Mathematical Economics, 2015, vol. 58, issue C, 7-15

Abstract: This paper makes the observation that a finite Bayesian game with diffused and disparate private information can be conceived of as a large game with a non-atomic continuum of players. By using this observation as its methodological point of departure, it shows that (i) a Bayes–Nash equilibrium (BNE) exists in a finite Bayesian game with private information if and only if a Nash equilibrium exists in the induced large game, and (ii) both Pareto-undominated and socially-maximal BNE exist in finite Bayesian games with private information. In particular, it shows these results to be a direct consequence of results for a version of a large game re-modeled for situations where different players may have different action sets.

Keywords: Non-atomic games; Saturated probability space; Nash equilibrium; Bayes–Nash equilibrium (BNE); Pareto-undominated equilibrium; Socially-maximal equilibrium (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:58:y:2015:i:c:p:7-15

DOI: 10.1016/j.jmateco.2015.02.001

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