Sunspot equilibrium and lottery equilibrium are two stochastic solution concepts for nonstochastic economies. We compare these concepts in a class of completely finite, (possibly) nonconvex exchange economies with perfect markets, which requires extending the lottery model to the finite case. Every equilibrium allocation of our lottery model is also a sunspot equilibrium allocation. The convers...

I model a scoring situation that arises frequently during soccer matches. The Nash equilibrium solution is shown to be broadly consistent with the conventional wisdom of experts. Data on goals scored over an entire season in Italy’s soccer league provide statistical support for a prediction of the model’s Nash equilibrium. D 2004 Elsevier B.V. All rights reserved.

The condition is derived for Friedman’s trigger strategy to sustain a collusive market equilibrium as a noncooperative Nash equilibrium given subjective beliefs as to the antitrust authority’s ability of succesfully disolving the illegal cartel.

This paper examines the implications of network externalities on equilibrium outcomes in a differentiated products duopoly under strategic managerial delegation through relative performance based incentive contracts. It shows that Miller and Pazgal (2001)'s equivalence result does not go through in the presence of network externalities. Instead, Singh and Vives (1984)'s rankings of equilibrium ...

In this paper, we deal with a planar location-price game where firms first select their locations and then set delivered prices in order to maximize their profits. If firms set the equilibrium prices in the second stage, the game is reduced to a location game for which pure strategy Nash equilibria are studied assuming that the marginal delivered cost is proportional to the distance between the...

We examine a novel idea for the detection of Nash Equilibrium developed in [14] and apply it to Equilibrium Problems with Equilibrium Constraints (EPECs). EPECs are Nash games which uniquely feature players constrained by a condition governing equilibrium of a parametric system. By redefining the selection criteria used in evolutionary methods, EPECs can be solved using Evolutionary Multiobject...

This is an extended write-up of a lecture introducing the concept of Nash equilibrium in the context of an auction-type game that one can observe being played by “ordinary people” in real time. In a simplified model, we give an explicit formula for the Nash equilibrium. The actual game is more complicated and more interesting; players place a bid on one item (among several) during a time window...

We examine dynamic models of evolutionary selection processes on asymmetric two-player games. Conditions are established under which dynamic selection processes will yield outcomes that respect iterated strict dominance. The addition of a stability requirement ensures that outcomes will be Nash equilibria. However, we find that stable outcomes need not respect weak dominance, and hence need not...

Solution The following is a Nash equilibrium: Player 1 calls and the other players do not call. Player 1’s payoff in this action profile is equal to v− c, and is greater than 0, which is the payoff he would get if he deviated and did not call. All the other players get a payoff of v, which is greater than the payoff that they would get if they were to deviate and call: v − c. Therefore, no play...

It is well known that a pure-strategy Nash equilibrium does not exist for a two-player rent-seeking contest when the contest success function parameter is greater than two. We analyze the contest using the concept of equilibrium in secure strategies, which is a generalization of the Nash equilibrium. It is defined by two conditions: (i) no player can make a profitable deviation that decreases t...