Equilibrium effort in games with homogeneous production functions and homogeneous valuation

Walter Ferrarese

International Journal of Economic Theory, 2022, vol. 18, issue 2, 195-212

Abstract: In this study, I analyze games in which the functions mapping a vector of efforts into each player's share of the prize and its value exhibit an arbitrary degree of homogeneity. I present a simple way to compute the equilibrium strategy and sufficient conditions for a unique interior symmetric pure‐strategy Nash equilibrium. The setup nests Malueg and Yates (2006), who exploit homogeneity for rent‐seeking contests with exogenous prize valuation, and shows that homogeneity can be used to solve (i) a wider range of rent‐seeking contests and (ii) other classes of games, like Cournot games with nonlinear inverse demand and possibly non homogeneous goods.

Date: 2022
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