Equilibrium in secure strategies

Mikhail Iskakov and Alexey Iskakov
Additional contact information
Mikhail Iskakov: Institute of Control Sciences RAS, Moscow
Alexey Iskakov: Institute of Control Sciences RAS, Moscow

No 2012061, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: A new concept of equilibrium in secure strategies (EinSS) in non-cooperative games is presented. The EinSS coincides with the Nash-Cournot Equilibrium when Nash-Cournot Equilibrium exists and postulates the incentive of players to maximize their profit under the condition of security against actions of other players. The new concept is illustrated by a number of matrix game examples and compared with other closely related theoretical models. We prove the existence of equilibrium in secure strategies in four classic games that fail to have Nash-Cournot equilibria. On an infinite line we obtain the solution in secure strategies of the classic Hotelling’s price game (1929) with a restricted reservation price and linear transportation costs. New type of monopolistic solution in secure strategies is discovered in the Tullock Contest (1967, 1980) of two players. For the model of insurance market we prove that the contract pair found by Rothschild, Stiglitz and Wilson (1976) is always an equilibrium in secure strategies. We characterize all equilibria in secure prices in the Bertrand-Edgeworth duopoly model with capacity constraints.

Keywords: equilibrium in secure strategies; Hotelling model; Tullock contest; insurance market; Bertrand-Edgeworth duopoly (search for similar items in EconPapers)
JEL-codes: C72 D03 D43 D72 L12 L13 (search for similar items in EconPapers)
Date: 2012-12-31
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://sites.uclouvain.be/core/publications/coredp/coredp2012.html (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2012061

Access Statistics for this paper

More papers in LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC.
Bibliographic data for series maintained by Alain GILLIS ().