Abstract
We provide sufficient conditions in finite-horizon multi-stage games for the value function of each player, associated to extremal Markov perfect equilibria, to display strategic complementarities and for the contemporaneous equilibrium to be increasing in the state variables.
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The author is grateful to Federico Echenique, Rabah Amir and one anonymous referee for useful comments, project SEJ2005-08263 at UPF and Project Consolider-Ingenio CSD2006-00016 of the Spanish Ministry of Education and Science, and the Barcelona Economics Program of CREA, for financial support.
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Vives, X. Strategic complementarity in multi-stage games. Econ Theory 40, 151–171 (2009). https://doi.org/10.1007/s00199-008-0354-8
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DOI: https://doi.org/10.1007/s00199-008-0354-8
Keywords
- Markov game
- Supermodularity
- Two-stage game
- Linear-quadatric game
- Adjustment costs
- Learning curve
- Network effects