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Two-aggregate games: Demonstration using a production-appropriation model

Richard Cornes, Roger Hartley and Yuji Tamura

CEPR Discussion Papers from Centre for Economic Policy Research, Research School of Economics, Australian National University

Abstract: We expand the scope of the two-aggregate method by applying it to a situation where many heterogeneous players are free to contribute to both aggregates. Such situations naturally arise in various resource allocation problems. Hence our method is useful in many applications. A production-appropriation model is employed to illustrate how the problem of establishing the Nash equilibrium can be reduced from solving n > 2 best response functions in n unknowns to solving two consistency conditions in two unknowns. We then conduct a comparative static exercise that the conventional approach could not handle easily? if at all? to demonstrate the power of our method.

Keywords: noncooperative game; aggregate game; con?ict; appropriation (search for similar items in EconPapers)
JEL-codes: C72 D74 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth
Date: 2017-01
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https://www.cbe.anu.edu.au/researchpapers/cepr/dp696.pdf (application/pdf)

Related works:
Working Paper: A New Approach to Solving Production-Appropriation Games with Many Heterogeneous Players (2010) Downloads
Working Paper: A New Approach to Solving Production-Appropriation Games with Many Heterogeneous Players (2010) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:auu:dpaper:696

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