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Smooth Monotone Contribution Games

Author

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  • Steven A. Matthews

    (Department of Economics, University of Pennsylvania)

Abstract

A monotone game is a multistage game in which no player can lower her action in any period below its previous level. A motivation for the monotone games of this paper is dynamic voluntary contribution to a public project. Each player's utility is a strictly concave function of the public good, and quasilinear in the private good. The main result is a description of the limit points of (subgame perfect) equilibrium paths as the period length shrinks. The limiting set of such profiles is equal to the undercore of the underlying static game - the set of profiles that cannot be blocked by a coalition using a smaller profile. A corollary is that the limiting set of achievable profiles does not depend on whether the players can move simultaneously or only in a round-robin fashion. The familiar core is the efficient subset of the undercore; hence, some but not all profiles that are efficient and individually rational can be nearly achieved when the period length is small. As the period length shrinks, any core profile can be achieved in a “twinkling of the eye†- neither real-time gradualism nor inefficiency are necessary.

Suggested Citation

  • Steven A. Matthews, 2006. "Smooth Monotone Contribution Games," PIER Working Paper Archive 06-018, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  • Handle: RePEc:pen:papers:06-018
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    File URL: https://economics.sas.upenn.edu/sites/default/files/filevault/working-papers/06-018.pdf
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    References listed on IDEAS

    as
    1. Leslie M. Marx & Steven A. Matthews, 2000. "Dynamic Voluntary Contribution to a Public Project," Review of Economic Studies, Oxford University Press, vol. 67(2), pages 327-358.
    2. Ben Lockwood & Jonathan P. Thomas, 2002. "Gradualism and Irreversibility," Review of Economic Studies, Oxford University Press, vol. 69(2), pages 339-356.
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    6. Ochs, Jack & Park, In-Uck, 2010. "Overcoming the coordination problem: Dynamic formation of networks," Journal of Economic Theory, Elsevier, vol. 145(2), pages 689-720, March.
    7. Zissimos, Ben, 2007. "The GATT and gradualism," Journal of International Economics, Elsevier, vol. 71(2), pages 410-433, April.
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    More about this item

    Keywords

    dynamic games; monotone games; core; public goods; voluntary contribution; gradualism;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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