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Scalable games: modelling games of incomplete information

Author

Listed:
  • Eccles, Peter

    () (Universidad Carlos III de Madrid)

  • Wegner, Nora

    () (Bank of England)

Abstract

We provide conditions to allow modelling situations of asymmetric information in a tractable manner. In addition, we show a novel relationship between certain games of asymmetric information and corresponding games of symmetric information. This framework establishes links between certain games separately studied in the literature. The class of games considered is defined by scalable preference relations and a scalable information structure. We show that this framework can be used to solve asymmetric contests and auctions with loss aversion.

Suggested Citation

  • Eccles, Peter & Wegner, Nora, 2017. "Scalable games: modelling games of incomplete information," Bank of England working papers 641, Bank of England.
  • Handle: RePEc:boe:boeewp:0641
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Asymmetric information; linear equilibria; global games;

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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