Working Paper: CEPR ID: DP5241
Authors: Simon P. Anderson; Maxim Engers
Abstract: We find the Nash equilibria for monotone n-player symmetric games where each player chooses whether to participate. Examples include market entry games, coordination games, and the bar-room game depicted in the movie 'A Beautiful Mind'. The symmetric Nash equilibrium involves excessive participation (a common property resource problem) if participants? payoffs are decreasing (in the number of participants), and insufficient participation if payoffs are increasing. With decreasing payoffs there can be many equilibria, but with increasing payoffs there are only three. Some comparative static properties of changing one player?s participation payoffs are counter-intuitive, especially with more than two players.
Keywords: common property resource problem; comparative statics; coordination; market entry; mixed strategy equilibrium; nash equilibrium
JEL Codes: C72; D43; L13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increased participation (I24) | lower individual payoffs (J31) |
| higher participation rates (J49) | diminishing returns for individual players (D29) |
| changes in one player's participation payoff (C72) | probabilities of others' participation (D79) |