A Characterization of Strategic Complementarities

39 Pages Posted: 5 May 2003

See all articles by Federico Echenique

Federico Echenique

California Institute of Technology - Division of the Humanities and Social Sciences

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Abstract

I characterize games for which there is an order on strategies such that the game has strategic complementarities. I prove that, with some qualifications, games with a unique equilibrium have complementarities if and only if Cournot best-response dynamics has no cycles; and that all games with multiple equilibria have complementarities.

As applications of my results, I show: 1. That generic 2X2 games either have no pure-strategy equilibria, or have complementarities. 2. That generic two-player finite ordinal potential games have complementarities.

JEL Classification: C62, C72

Suggested Citation

Echenique, Federico, A Characterization of Strategic Complementarities. Available at SSRN: https://ssrn.com/abstract=385821 or http://dx.doi.org/10.2139/ssrn.385821

Federico Echenique (Contact Author)

California Institute of Technology - Division of the Humanities and Social Sciences ( email )

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