Complementarities and Macroeconomics: Poisson Games

Miltiadis Makris

No 602, Discussion Papers from University of Exeter, Department of Economics

Abstract: In many situations in macroeconomics strategic complementarities arise, and agents face a coordination problem. An important issue, from both a theoretical and a policy perspective, is equilibrium uniqueness. We contribute to this literature by focusing on the macroeconomic aspect of the problem: the number of potential innovators, speculators e.t.c. is large. In particular, we follow Myerson (1998, 2000) that in large games “a more realistic model should admit some uncertainty about the number of players in the game”. In more detail, we model the coordination problem as a Poisson game, and investigate the conditions under which unique equilibrium selection is obtained.

Keywords: Strategic Complementarities; Coordination Games; Poisson Games; Currency Crises; Innovation. (search for similar items in EconPapers)
JEL-codes: D89 F31 (search for similar items in EconPapers)
Date: 2006-01
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Journal Article: Complementarities and macroeconomics: Poisson games (2008)
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