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Discontinuous Payoffs, Shared Resources, and Games of Fiscal Competition: Existence of Pure Strategy Nash Equilibrium
Author(s) -
ROTHSTEIN PAUL
Publication year - 2007
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/j.1467-9779.2007.00310.x
Subject(s) - nash equilibrium , mathematical economics , economics , competition (biology) , microeconomics , class (philosophy) , best response , strategy , folk theorem , symmetric equilibrium , epsilon equilibrium , repeated game , capital (architecture) , public good , game theory , equilibrium selection , computer science , history , ecology , archaeology , artificial intelligence , biology
Abstract We define a class of games with discontinuous payoffs that we call shared resource games and establish a pure strategy Nash equilibrium existence theorem for these games. We then apply this result to a canonical game of fiscal competition for mobile capital. Other applications are also discussed. Our result for the mobile capital game holds for any finite number of regions, permits general preferences over private and public goods, and does not assume that production technologies have a particular functional form, or are identical in all regions, or satisfy the Inada condition at zero.