Economy and Disability by Akihiko Matsui
Author:Akihiko Matsui
Language: eng
Format: epub
ISBN: 9789811376238
Publisher: Springer Singapore
10.2 The Model
Consider a world in which infinitely many anonymous and identical agents are randomly matched to play some games. Time is continuous, the horizon is infinite, and each agent is expected to match with another agent once per unit of time. In each matching, two agents play one of two component games given in Table 10.1. The game to be played is randomly assigned by Nature with an equal probability. We assume that
(10.1)
holds, i.e., that each game has two strict Nash equilibria, and that (L, L) Pareto-dominates (R, R) in game , and (r, r) Pareto-dominates (l, l) in game .Table 10.1Component games and
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