Strategic complements and substitutes, and potential games

Pradeep Dubey, Ori Haimanko*, Andriy Zapechelnyuk

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    131 Citations (Scopus)

    Abstract

    We show that games of strategic complements, or substitutes, with aggregation are "pseudo-potential" games. The upshot is that they possess Nash equilibria in pure strategies (NE), even if the strategy sets are not convex; and that various dynamic processes converge to NE. In particular, NE exist in Cournot oligopoly with indivisibilities in production. Our notion of aggregation is quite general and enables us to take a unified view of several disparate models.

    Original languageEnglish
    Pages (from-to)77-94
    Number of pages18
    JournalGames and Economic Behavior
    Volume54
    Issue number1
    DOIs
    Publication statusPublished - Jan 2006

    Keywords

    • Cournot oligopoly
    • Nash equilibrium
    • Pseudo-potential games
    • Strategic complements and substitutes

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