This paper studies a dynamic adjustment process in a large society of forward-looking agents where payoffs are given by a normal form supermodular game. The stationary states of the dynamics correspond to the Nash equilibria of the stage game. It is shown that if the stage game has a monotone...

We introduce elements of state-dependent pricing and strategic complementarity within an otherwise standard "New Open Economy Macroeconomics" model, and develop its implications for the dynamics of real and nominal economic activity. Under a traditional Producer-Currency-Pricing environment, our...

This paper discusses the value of information in games with state contingent payoffs, using a simple two-stage duopoly model. In the first stage, each duopolist simultaneously chooses whether to observe the market demand, which is either high or low. The second stage game is an ordinary...

In this article we construct a network of roads connecting large Indian cities and we evaluate this network’s overall performance. We consider a model where the production efforts of connected cities are strategic complements, and we relate the equilibrium effort proï¬le to a well known...

In this general equilibrium framework, the transportation sector is modeled as a distinct sector with increasing returns. A more advanced technology has a higher fixed cost but a lower marginal cost of production. Even with both manufacturing firms and transportation firms engaged in...

This paper focuses on strategic interaction within a family and examines individual decision making. We set up a two-stage game model. In the first stage of the game, a man and a woman who have not yet met simultaneously determine their education levels non-cooperatively. In the second stage,...

A principal offers bilateral contracts to a set of agents organized in a network conveying synergies, in a context where agents' efforts are observable and where the principal's objective increases with the sum of efforts. We characterize optimal contracts as a function of agents' positions on...

In a setting where an infinite population of players interact locally and repeatedly, we study the impacts of payoff structures and network structures on contagion of a convention beyond 2×2 coordination games. First, we consider the “bilingual game”, where each player chooses one of two...

This paper studies a dynamic adjustment process in a large society of forward-looking agents where payoffs are given by a normal form supermodular game. The stationary states of the dynamics correspond to the Nash equilibria of the stage game. It is shown that if the stage game has a monotone...