Equilibrium Selection in Games with Macroeconomic Complementarities

Arbeitspapier

We apply the stochastic evolutionary approach of equilibrium selection tomacroeconomic models in which a complementarity at the macro level ispresent. These models often exhibit multiple Pareto-ranked Nash equilibria,and the best response-correspondence of an individual increases with ameasure of the aggregate state of the economy. Our main theoretical resultshows how the equilibrium that is singled out by the evolutionary dynamicsis directly related to the underlying externality that creates themultiplicity problem in the underlying macroeconomic stage game. We alsoprovide clarifying examples from the macroeconomic literature.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. 99-096/1

Classification and Topics

• Classification: Wirtschaft ; Computational Techniques; Simulation Modeling ; Noncooperative Games ; Stochastic and Dynamic Games; Evolutionary Games; Repeated Games ; General Aggregative Models: Other ; Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices
• Subject: Gleichgewichtstheorie ; Theorie ; Evolutionäre Spieltheorie ; Simultanes Gleichungssystem

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kaarbøe, Oddvar M. ; Tieman, Alexander F.
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2000

Further information

• Handle: http://hdl.handle.net/10419/85713
• Last update: 10.03.2025, 11:45 AM CET