Markov distributional equilibrium dynamics in games with complementarities and no aggregate risk

Lukasz Balbus (), Pawel Dziewulski (), Kevin Reffett () and Łukasz Woźny
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Lukasz Balbus: Faculty of Mathematics, Computer Science and Econometrics, University of Zielona Gora
Pawel Dziewulski: Department of Economics, University of Sussex
Kevin Reffett: Department of Economics, Arizona State University

Theoretical Economics, 2022, vol. 17, issue 2

Abstract: We present a new approach to studying equilibrium dynamics in a class of stochastic games with a continuum of players with private types and strategic complementarities. We introduce a suitable equilibrium concept, called Markov Stationary Nash Distributional Equilibrium (MSNDE), prove its existence, and determine comparative statics of equilibrium paths and the steady state invariant distributions to which they converge. Finally, we provide numerous applications of our results including: dynamic models of growth with status concerns, social distance, and paternalistic bequests with endogenous preferences for consumption.

Keywords: Large games; distributional equilibria; supermodular games; comparative dynamics; non-aggregative games; social interactions (search for similar items in EconPapers)
JEL-codes: C62 C72 C73 (search for similar items in EconPapers)
Date: 2022-05-05
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Markov distributional equilibrium dynamics in games with complementarities and no aggregate risk (2020)
Working Paper: Markov distributional equilibrium dynamics in games with complementarities and no aggregate risk (2020)
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