Heterogeneity in a Class of Two-Player Games

In two-player games with negative (positive) spillovers it is well-known that symmetric agents both overact (underact) at the Nash equilibria. We show that for heterogeneous agents this rule of thumb has to be amended if the game features strategic substitutability.

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Year of publication:	2011
Authors:	Figuières, Charles ; Rychen, Frédéric
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 31.2011, 1, p. 426-435
Publisher:	AccessEcon
Subject:	heterogeneity \| over(under)-investment \| strategic complementarity \| strategic substitutability \| two-player games

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Extent:	application/pdf
Type of publication:	Article
Language:	English
Classification:	C7 - Game Theory and Bargaining Theory ; D6 - Welfare Economics
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008799753