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A simple framework for investigating the properties of policy games

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  • Piacquadio Paolo G.
  • Di Bartolomeo Giovanni
  • Acocella Nicola

Abstract

The paper extensively studies the static model of non-cooperative linear quadratic games in which a set of agents chooses their instruments strategically to minimize their linear quadratic criterion. We first derive the necessary and sufficient conditions for the existence of a Nash equilibrium as well as for multiple equilibria to arise. Furthermore, we study the general condition for policy neutrality and Pareto efficiency of the equilibrium by introducing a new concept of decisiveness.

Suggested Citation

  • Piacquadio Paolo G. & Di Bartolomeo Giovanni & Acocella Nicola, 2009. "A simple framework for investigating the properties of policy games," wp.comunite 0059, Department of Communication, University of Teramo.
    • Handle: RePEc:ter:wpaper:0059
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    References listed on IDEAS

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    More about this item

    Keywords

    Conflict of interest; Nash equilibrium existence; multiplicity; policy invariance; controllability; Pareto efficiency;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D6 - Microeconomics - - Welfare Economics

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