A simple framework for investigating the properties of policy games

Paolo Giovanni Piacquadio, Giovanni Di Bartolomeo () and Nicola Acocella

No 59, CIMEO, Sapienza University of Rome from Department of Economics and Law, Sapienza University of Rome

Abstract: The paper extensively studies the static model of non-cooperative linear quadratic games in which a set of agents chooses their instruments strategically to minimize their linear quadratic criterion. We first derive the necessary and sufficient conditions for the existence of a Nash equilibrium as well as for multiple equilibria to arise. Furthermore, we study the general condition for policy neutrality and Pareto efficiency of the equilibrium by introducing a new concept of decisiveness.

Keywords: Conflict of interest; Nash equilibrium existence; multiplicity; policy invariance; controllability; Pareto efficiency (search for similar items in EconPapers)
JEL-codes: C7 D6 (search for similar items in EconPapers)
Date: 2009-12
New Economics Papers: this item is included in nep-hap, nep-ltv and nep-soc
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Persistent link: https://EconPapers.repec.org/RePEc:ter:wpaper:0059

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