Supermodularity and Tipping

Geoffrey Heal and Howard Kunreuther

No 12281, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We model tipping as a game-theoretic phenomenon and investigate the connection between supermodular games, tipping of equilibria and cascading, and apply the results to issues that arise in the context of homeland security and computer security. We show that tipping and cascading can occur in supermodular games and that "increasing differences" is a sufficient condition for tipping. Supermodularity and tipping of equilibria are closely related. We relate our results to Schelling's early work on tipping.

JEL-codes: C72 D80 H23 (search for similar items in EconPapers)
Date: 2006-06
New Economics Papers: this item is included in nep-gth and nep-pbe
Note: PE
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Citations: View citations in EconPapers (3)

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