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Irrelevance of the Strategic Variable in the Case of Relative Performance Maximization

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  • Philipowski Robert

    (Debeka Lebensversicherungsverein a. G., 56058Koblenz, Germany)

Abstract

We study games with two possibilities for the strategic variable and find that contrary to the Nash equilibrium the evolutionarily stable equilibrium – provided it uniquely exists – does not depend on which possibility is chosen. Our result generalizes recent findings of Satoh, Tanaka and Wagener who studied this issue in various special cases.

Suggested Citation

  • Philipowski Robert, 2019. "Irrelevance of the Strategic Variable in the Case of Relative Performance Maximization," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 19(1), pages 1-7, January.
    • Handle: RePEc:bpj:bejtec:v:19:y:2019:i:1:p:7:n:7
    DOI: 10.1515/bejte-2017-0012
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    References listed on IDEAS

    as
    1. Yasuhito Tanaka, 2013. "Irrelevance of the choice of strategic variables in duopoly under relative profit maximization," Economics and Business Letters, Oviedo University Press, vol. 2(2), pages 75-83.
    2. Yasuhito Tanaka, 2013. "Equivalance of Cournot and Bertrand equilibria in differentiated duopoly under relative profit maximization with linear demand," Economics Bulletin, AccessEcon, vol. 33(2), pages 1479-1486.
    3. Satoh, Atsuhiro & Tanaka, Yasuhito, 2015. "Relative profit maximization and the choice of strategic variables in duopoly," MPRA Paper 63000, University Library of Munich, Germany.
    4. Satoh, Atsuhiro & Tanaka, Yasuhito, 2014. "Relative profit maximization in asymmetric oligopoly: Cournot and Bertrand equilibria," MPRA Paper 55883, University Library of Munich, Germany.
    5. Yasuhito Tanaka, 1999. "Long run equilibria in an asymmetric oligopoly," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 14(3), pages 705-715.
    6. Andreas Wagener, 2016. "Evolutionary Stability in Fiscal Competition," CESifo Working Paper Series 5791, CESifo.
    7. Andreas Wagener, 2013. "Tax Competition, Relative Performance, And Policy Imitation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54, pages 1251-1264, November.
    8. George R. Zodrow & Peter Mieszkowski, 2019. "Pigou, Tiebout, Property Taxation, and the Underprovision of Local Public Goods," World Scientific Book Chapters, in: George R Zodrow (ed.), TAXATION IN THEORY AND PRACTICE Selected Essays of George R. Zodrow, chapter 17, pages 525-542, World Scientific Publishing Co. Pte. Ltd..
    9. Tanaka, Yasuhito, 2000. "Stochastically stable states in an oligopoly with differentiated goods: equivalence of price and quantity strategies," Journal of Mathematical Economics, Elsevier, vol. 34(2), pages 235-253, October.
    10. Atsuhiro Satoh & Yasuhito Tanaka, 2014. "Relative profit maximization and equivalence of Cournot and Bertrand equilibria in asymmetric duopoly," Economics Bulletin, AccessEcon, vol. 34(2), pages 819-827.
    11. Carlos Alós-Ferrer & Ana Ania, 2005. "The evolutionary stability of perfectly competitive behavior," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(3), pages 497-516, October.
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    More about this item

    Keywords

    games with two possibilities for the strategic variable; relative performance; evolutionarily stable strategy;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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