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http://ssrn.com/abstract=909520
 
 

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Smooth Monotone Contribution Games


Steven A. Matthews


University of Pennsylvania - Department of Economics

June 15, 2006

PIER Working Paper No. 06-018

Abstract:     
A monotone game is a multistage game in which no player can lower her action in any period below its previous level. A motivation for the monotone games of this paper is dynamic voluntary contribution to a public project. Each player's utility is a strictly concave function of the public good, and quasilinear in the private good. The main result is a description of the limit points of (subgame perfect) equilibrium paths as the period length shrinks. The limiting set of such profiles is equal to the undercore of the underlying static game - the set of profiles that cannot be blocked by a coalition using a smaller profile. A corollary is that the limiting set of achievable profiles does not depend on whether the players can move simultaneously or only in a round-robin fashion. The familiar core is the efficient subset of the undercore; hence, some but not all profiles that are efficient and individually rational can be nearly achieved when the period length is small. As the period length shrinks, any core profile can be achieved in a "twinkling of the eye" - neither real-time gradualism nor inefficiency are necessary.

Number of Pages in PDF File: 37

Keywords: dynamic games, monotone games, core, public goods, voluntary contribution, gradualism

JEL Classification: C7

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Date posted: June 16, 2006  

Suggested Citation

Matthews, Steven A., Smooth Monotone Contribution Games (June 15, 2006). PIER Working Paper No. 06-018. Available at SSRN: http://ssrn.com/abstract=909520 or http://dx.doi.org/10.2139/ssrn.909520

Contact Information

Steven A. Matthews (Contact Author)
University of Pennsylvania - Department of Economics ( email )
160 McNeil Building
3718 Locust Walk
Philadelphia, PA 19104
United States
215-898-7749 (Phone)
215-573-2057 (Fax)
HOME PAGE: http://www.econ.upenn.edu/~stevenma
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