 Representing equilibrium aggregates in aggregate games with applications to common agencyDavid Martimort and Lars Stole PSE-Ecole d'économie de Paris (Postprint) from HAL Abstract: An aggregate game is a normal-form game with the property that each player's payoff is a function of only his own strategy and an aggregate of the strategy profile of all players. Such games possess properties that can often yield simple characterizations of equilibrium aggregates without requiring that one solves for the equilibrium strategy profile. When payoffs have a quasi-linear structure and a degree of symmetry, we construct a self-generating maximization program over the space of aggregates with the property that the solution set corresponds to the set of equilibrium aggregates of the original n-player game. We illustrate the value of this approach in common-agency games where the players' strategy space is an infinite-dimensional space of nonlinear contracts. We derive equilibrium existence and characterization theorems for both the adverse selection and moral hazard versions of these games. Keywords: Aggregate games; Common agency games; Supply-function games (search for similar items in EconPapers) Published in Games and Economic Behavior, 2012, 76 (2), pp.753-772. ⟨10.1016/j.geb.2012.08.005⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:hal-00813181 DOI: 10.1016/j.geb.2012.08.005 Access Statistics for this paper More papers in PSE-Ecole d'économie de Paris (Postprint) from HAL |
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