Strategic complements, substitutes, and ambiguity: the implications for public goods
Eichberger, Jürgen; Kelsey, David
Date: 1 October 2002
Journal
Journal of Economic Theory
Publisher
Elsevier
Publisher DOI
Related links
Abstract
We examine the effect of ambiguity in symmetric games with aggregate externalities. We find that ambiguity will increase/decrease the equilibrium strategy in games with strategic complements/substitutes and positive externalities. These effects are reversed in games with negative externalities. We consider some economic applications ...
We examine the effect of ambiguity in symmetric games with aggregate externalities. We find that ambiguity will increase/decrease the equilibrium strategy in games with strategic complements/substitutes and positive externalities. These effects are reversed in games with negative externalities. We consider some economic applications of these results to Cournot oligopoly, bargaining, macroeconomic coordination, and voluntary donations to a public good. In particular we show that ambiguity may reduce free-riding. Comparative statics analysis shows that increases in uncertainty will increase donations, to a public good.
Economics
Faculty of Environment, Science and Economy
Item views 0
Full item downloads 0