Expectational Stability In Aggregative Games

Richard Cornes, Luciana Fiorini, Wilfredo Maldonado

Research output: Working paperDiscussion paper

Abstract

Using the replacement function associated with aggregative games, we analyze the expectational dynamics of the aggregate strategy of the game. We can interpret the Nash equilibrium of the game as the rational expectations equilibrium (REE) of the system, and we examine the expectational stability of the REE. We characterize local stability in terms of fundamentals and the REE itself. We illustrate the results through well-known aggregative games (Cournot games, Bertrand competition with differentiated goods, rent seeking games, and the public goods provision game) and analyze their global expectational dynamics.
Original languageEnglish
PublisherUWA Business School
Publication statusPublished - 2017

Publication series

NameEconomics Discussion Papers
No.6
Volume17

Fingerprint Dive into the research topics of 'Expectational Stability In Aggregative Games'. Together they form a unique fingerprint.

Cite this