Extremal Choice Equilibrium: Existence and Purification with Infinite-Dimensional Externalities

Paulo Barelli and John Duggan ()
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John Duggan: University of Rochester, http://www.johnduggan.net/

No 567, RCER Working Papers from University of Rochester - Center for Economic Research (RCER)

Abstract: We prove existence and purification results for equilibria in which players choose extreme points of their feasible actions in a class of strategic environments exhibiting a product structure. We assume finite-dimensional action sets and allow for infinite-dimensional externalities. Applied to large games, we obtain existence of Nash equilibrium in pure strategies while allowing a continuum of groups and general dependence of payoffs on average actions across groups, without resorting to saturated measure spaces. Applied to games of incomplete information, we obtain a new purification result for Bayes-Nash equilibria that permits substantial correlation across types, without assuming conditional independence given the realization of a finite environmental state. We highlight our results in examples of industrial organization, auctions, and voting.

Pages: 29 pages
Date: 2011-10
New Economics Papers: this item is included in nep-gth and nep-mic
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Citations: View citations in EconPapers (1)

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