Working Paper: CEPR ID: DP9814
Authors: Kfir Eliaz; Rani Spiegler
Abstract: What is common to the following situations: incentivizing collective action in the presence of social preferences, monopoly pricing when consumers are loss averse, arms races when players are privately informed of their armament costs? We present a simple formalism, called X-games, which unifies these situations as well as others, and use it to unify and extend the separate analyses that they received in the literature.
Keywords: contagion; coordination; externalities; strategic complementarities
JEL Codes: C72
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| incentive scheme design (M52) | unique Nash equilibrium (C72) |
| distribution of armament costs (H56) | strategic decisions (L21) |
| random pricing policy (D49) | consumer willingness to pay (D11) |
| distribution of wealth among risk-averse agents (D39) | investment decisions (G11) |
| distribution of benefits from new technology (O33) | firms' technology adoption decisions (O33) |