GAMES OF CROWDING

Steve Alpern and Diane Reyniers
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Steve Alpern: Department of Mathematics, The London School of Economics, Houghton Street, London WC2A 2AE, UK
Diane Reyniers: Interdisciplinary Institute of Management, The London School of Economics, Houghton Street, London WC2A 2AE, UK

International Game Theory Review (IGTR), 2001, vol. 03, issue 01, 27-56

Abstract: We introduce the notion of a "crowding game", where individuals choose to locate themselves among finitely many compartments, each with a capacity (size) and a cost (price). Individuals have a common notion of physical comfort (freedom from crowding), which is increasing in the size of their compartment, decreasing in the number (or mass) of other individuals choosing it. Where individuals differ is in their sensitivity to the cost of the compartment. Under these assumptions, we find unique equilibria in which no individual wishes to change compartments. After dealing with these notions of equilibrium play in games of crowding, we discuss the optimal design of such games by a supplier who can choose the capacities and costs of the compartments. The supplier's objective might be profit or welfare maximisation, or perhaps the maximisation of the number of individuals who enter some compartment.

JEL-codes: B4 C0 C6 C7 D5 D7 M2 (search for similar items in EconPapers)
Date: 2001
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DOI: 10.1142/S0219198901000294

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