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Aggregate comparative statics

  • Acemoglu, Daron
  • Jensen, Martin Kaae

In aggregative games, each playerʼs payoff depends on her own actions and an aggregate of the actions of all the players. Many common games in industrial organization, political economy, public economics, and macroeconomics can be cast as aggregative games. This paper provides a general and tractable framework for comparative static results in aggregative games. We focus on two classes of games: (1) aggregative games with strategic substitutes and (2) nice aggregative games, where payoff functions are continuous and concave in own strategies. We provide simple sufficient conditions under which positive shocks to individual players increase their own actions and have monotone effects on the aggregate. The results are illustrated with applications to public good provision, contests, Cournot competition and technology choices in oligopoly.

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Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 81 (2013)
Issue (Month): C ()
Pages: 27-49

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Handle: RePEc:eee:gamebe:v:81:y:2013:i:c:p:27-49
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622836

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