Externalities in Economies with Endogenous Sharing Rules

Philippe Bich (1, 2) , Rida Laraki (3)

1 PSE - Paris School of Economics
2 CES - Centre d'économie de la Sorbonne
3 X - École polytechnique

Endogenous sharing rules were introduced by Simon and Zame [16] to model payoff indeterminacy in discontinuous games. They prove the existence in every compact strategic game of a mixed Nash equilibrium and an associated sharing rule. We extend their result to economies with externalities [1] where, by definition, players are restricted to pure strategies. We also provide a new interpretation of payoff indeterminacy in Simon and Zame's model in terms of preference incompleteness.

Mots clés: Incomplete and Discontinuous Preferences; rasian Equilibrium; Wal; Better Reply Security; Economies; Generalized Games; Endogenous Sharing Rules

Domaines: Economies et finances

Philippe Bich, Rida Laraki. Externalities in Economies with Endogenous Sharing Rules. Economic Theory Bulletin, 2017, 5 (2), pp.127-137. ⟨10.1007/s40505-017-0118-3⟩. ⟨halshs-01437507⟩