Strategic complements and substitutes, and potential games

Pradeep Dubey, Ori Haimanko, Andriy Zapechelnyuk

Research output: Contribution to journalArticlepeer-review

113 Scopus citations

Abstract

We show that games of strategic complements, or substitutes, with aggregation are "pseudo-potential" games. The upshot is that they possess Nash equilibria in pure strategies (NE), even if the strategy sets are not convex; and that various dynamic processes converge to NE. In particular, NE exist in Cournot oligopoly with indivisibilities in production. Our notion of aggregation is quite general and enables us to take a unified view of several disparate models.

Original languageEnglish
Pages (from-to)77-94
Number of pages18
JournalGames and Economic Behavior
Volume54
Issue number1
DOIs
StatePublished - 1 Jan 2006

Keywords

  • Cournot oligopoly
  • Nash equilibrium
  • Pseudo-potential games
  • Strategic complements and substitutes

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