Aggregate games and public economics

Economics

Further details

An aggregative game is one in which every player's payoff is a function of two quantities - that player's choice variable and the sum of every player's choice variable. We show how such games may be analysed using 'replacement functions' and "share functions". Our approach avoids the proliferation of dimensions as the number of players is increased, and can readily analyse games involving many heterogeneous players. We demonstrate the approach at work on two public economic models - (i) voluntary public good provision, and (ii) surplus and cost sharing games.