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Exploiting homogeneity in games with non-homogeneous revenue functions

Author

Listed:
  • Walter Ferrarese

    (Universitat de les Illes Balears)

  • Antoni Rubí-Barceló

    (Universitat de les Illes Balears)

Abstract

We exploit the properties of homogeneous functions to characterize the symmetric pure-strategy Nash equilibria of n-player games in which each player’s revenue function is not homogeneous but it can be decomposed into the sum of homogeneous functions with different degrees of homogeneity. These fea- tures are met in a wide range of games, including contests, imperfect competition, or public good games. Our results aim to contribute an easy checklist for finding the symmetric pure-strategy Nash equilibria. We apply these results to three examples.

Suggested Citation

  • Walter Ferrarese & Antoni Rubí-Barceló, 2022. "Exploiting homogeneity in games with non-homogeneous revenue functions," DEA Working Papers 95, Universitat de les Illes Balears, Departament d'Economía Aplicada.
    • Handle: RePEc:ubi:deawps:95
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    References listed on IDEAS

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    1. Subhasish Chowdhury & Roman Sheremeta, 2011. "A generalized Tullock contest," Public Choice, Springer, vol. 147(3), pages 413-420, June.
    2. Szidarovszky, F & Yakowitz, S, 1977. "A New Proof of the Existence and Uniqueness of the Cournot Equilibrium," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(3), pages 787-789, October.
    3. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-894, Supplemen.
    4. David Malueg & Andrew Yates, 2006. "Equilibria in rent-seeking contests with homogeneous success functions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 27(3), pages 719-727, April.
    5. Chowdhury, Subhasish M. & Sheremeta, Roman M., 2011. "Multiple equilibria in Tullock contests," Economics Letters, Elsevier, vol. 112(2), pages 216-219, August.
    6. Walter Ferrarese, 2022. "Equilibrium effort in games with homogeneous production functions and homogeneous valuation," International Journal of Economic Theory, The International Society for Economic Theory, vol. 18(2), pages 195-212, June.
    7. Corchón, Luis C. & Torregrosa, Ramón J., 2020. "Cournot equilibrium revisited," Mathematical Social Sciences, Elsevier, vol. 106(C), pages 1-10.
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    Keywords

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    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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