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Coalition-Proofness in Aggregative Games with Strategic Substitutes and Externalities

32 Pages Posted: 9 Apr 2012  

Federico Quartieri

affiliation not provided to SSRN

Ryusuke Shinohara

Department of Economics, Hosei University

Date Written: April 9, 2012

Abstract

We examine the welfare properties, coalition-proofness and order-theoretical structure of the set of Nash equilibria in pure strategy games with a-aggregative simple strategic substitutes and monotone a-aggregative externalities. For these games, we prove the equivalence among the set of Nash equilibria, the set of coalition-proof Nash equilibria under strong Pareto dominance and the set of Nash equilibria that are strongly Pareto undominated by other Nash equilibria; besides, we prove that the fixed points of some "extremal" selections from the joint best reply correspondence are both coalition-proof Nash equilibria under weak Pareto dominance and weakly Pareto undominated by other Nash equilibria. We also point out some errors in the relevant literature. Finally, we show various applications of our results to classes of games of economic interest.

Keywords: coalition-proof Nash equilibrium, aggregative games, strategic substitutes, externalities, Pareto dominance

JEL Classification: C72

Suggested Citation

Quartieri, Federico and Shinohara, Ryusuke, Coalition-Proofness in Aggregative Games with Strategic Substitutes and Externalities (April 9, 2012). Available at SSRN: https://ssrn.com/abstract=2036697 or http://dx.doi.org/10.2139/ssrn.2036697

Federico Quartieri

affiliation not provided to SSRN ( email )

Ryusuke Shinohara (Contact Author)

Department of Economics, Hosei University ( email )

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Aihara-machi
Machida, Tokyo 194-0298
Japan
+81-42-783-2534 (Phone)

HOME PAGE: http://ryusukeshinohara.ehoh.net/

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