We employ the theory of Bayesian potential games to characterize pure-strategy equilibria of a Bayesian game with finite type structures, taking into account the cost/benefit features of agents. Building on a standard model of oligopolistic competition also applicable to environmental issues such as profit maximization in presence of an externality affecting all players, we rely on types to describe their heterogeneity. When the damage functions are additively separable, the potential provides necessary and sufficient conditions to ensure monotonicity of pure strategies.

A Bayesian potential game to illustrate heterogeneity in cost/benefit characteristics / Palestini, Arsen; Ilaria, Poggio. - In: INTERNATIONAL REVIEW OF ECONOMICS. - ISSN 1865-1704. - STAMPA. - 62:1(2015), pp. 23-39. [10.1007/s12232-014-0221-9]

A Bayesian potential game to illustrate heterogeneity in cost/benefit characteristics

PALESTINI, Arsen;
2015

Abstract

We employ the theory of Bayesian potential games to characterize pure-strategy equilibria of a Bayesian game with finite type structures, taking into account the cost/benefit features of agents. Building on a standard model of oligopolistic competition also applicable to environmental issues such as profit maximization in presence of an externality affecting all players, we rely on types to describe their heterogeneity. When the damage functions are additively separable, the potential provides necessary and sufficient conditions to ensure monotonicity of pure strategies.
2015
Bayesian game; cost/benefit; heterogeneity; potential; pure-strategy equilibrium
01 Pubblicazione su rivista::01a Articolo in rivista
A Bayesian potential game to illustrate heterogeneity in cost/benefit characteristics / Palestini, Arsen; Ilaria, Poggio. - In: INTERNATIONAL REVIEW OF ECONOMICS. - ISSN 1865-1704. - STAMPA. - 62:1(2015), pp. 23-39. [10.1007/s12232-014-0221-9]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11573/657223
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