Differential Information in Large Games with Strategic Complementarities
University of Zielona Gora - Institute of Mathematics
University of Oxford - Department of Economics
Arizona State University - Department of Economics
Lukasz Patryk Wozny
Warsaw School of Economics - Quantitative Economics Department
January 19, 2013
We study equilibrium in large games of strategic complementarities (GSC) with a differential information and continuum of players. For our game, we define an appropriate notion of distributional Bayesian-Nash equilibrium in the sense of Mas-Colell (1984), and prove its existence. Further, we characterize the order-theoretic properties of the equilibrium set, provide monotone comparative statics results for ordered perturbations of the space of games, and provide explicit algorithms for computing extremal equilibrium. Our results make extensive use of the recent results on aggregating single crossing properties in Quah, Strulovici (2012). We complement these with new results on the existence of Bayesian-Nash equilibrium in the sense of Balder, Rustichini (1994) or Kim, Yannelis (1997) for large GSC, and provide analogous results for this notion of equilibrium. To obtain our results, we prove an new fixed point theorem on monotone operators in countably complete partially ordered sets. Applications of the results include riot games, "beauty contests" and common value auctions.
Number of Pages in PDF File: 34
Keywords: arge games, differential information, distributional equilibria, supermodular games, aggregating single crossing
JEL Classification: C72working papers series
Date posted: January 20, 2013 ; Last revised: February 3, 2013
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