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As European countries move towards complete unbundling in electricity markets, some issues regarding market design are still under discussion. In particular, which market configuration would give the right incentives to promote efficiency and reduce final prices. In this paper we analyze a...
Persistent link: https://www.econbiz.de/10014052206
Game theory and econometrics are central tools in economic analysis. In this paper, we study what happens if players in a game use econometric tools to form their opinion about the other players' behavior. In particular, we analyze the case where each player observes a number of outcomes of a...
Persistent link: https://www.econbiz.de/10013242842
This chapter is devoted to the study of Nash equilibria, and correlated equilibria in both finite and infinite games. We restrict our discussions to only those properties that are somewhat special to the case of two-person games. Many of these properties fail to extend even to three-person...
Persistent link: https://www.econbiz.de/10014024501
This chapter examines the conceptual foundations of the concept of strategic equilibrium and its various variants and refinements. The emphasis is very much on the underlying ideas rather than on any technical details.After an examination of some pre-equilibrium ideas, in particular the concept...
Persistent link: https://www.econbiz.de/10014024503
This chapter of the Handbook of Game Theory (Vol. 3) provides an overview of the theory of Nash equilibrium and its refinements. The starting-point is the rationalistic approach to games and the question whether there exists a convincing, self-enforcing theory of rational behavior in...
Persistent link: https://www.econbiz.de/10014024504
We study the equilibrium existence problem in normal form and qualitative games in which it is possible to associate with each nonequilibrium point an open neighborhood and a collection of deviation strategies such that, at any nonequilibrium point of the neighborhood, a player can increase her...
Persistent link: https://www.econbiz.de/10013133363
Under some conditions, parameterized games with strategic substitutes exhibit monotone comparative statics of equilibria. These conditions relate to a tradeoff between a direct parameter effect and an opposing, indirect strategic substitute effect. If the indirect effect does not dominate the...
Persistent link: https://www.econbiz.de/10012894086
We show that supermodular games satisfying sequential better-reply security possess a pure strategy perfect equilibrium and a strategically stable set of pure strategies. We illustrate that, in continuous supermodular games, perfect equilibria may contain weakly dominated actions. Moreover, in...
Persistent link: https://www.econbiz.de/10009686774
It is well known that an upper semi-continuous compact- and convex-valued mapping fi from a nonempty compact and convex set X to the Euclidean space of which X is a subset has at least one stationary point, being a point in X at which the image fi(x) has a nonempty intersection with the normal...
Persistent link: https://www.econbiz.de/10011327822
The Nash bargaining solution of a modified bargaining problem in the contract space yields the pair of stationary subgame perfect equilibrium proposals in the alternating offers model, also for positive time between proposals. As time vanishes, convergence to the Nash bargaining solution is...
Persistent link: https://www.econbiz.de/10011343949