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Strategic interaction and aggregate incentives

Abstract : We consider a model of interdependent efforts, with linear interaction and lower bound on effort. Our setting encompasses asymmetric interaction and heterogeneous agents’ characteristics. We examine the impact of a rise of cross-effects on aggregate efforts. We show that the sign of the comparative static effects is related to a condition of balancedness of the interaction. Moreover, we point out that asymmetry and heterogeneous characteristics are sources of non-monotonic variation of aggregate efforts.
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Submitted on : Wednesday, March 29, 2017 - 5:32:26 PM
Last modification on : Tuesday, August 2, 2022 - 5:17:45 PM

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Mohamed Belhaj, Frédéric Deroïan. Strategic interaction and aggregate incentives. Journal of Mathematical Economics, 2013, 49 (3), pp.183-188. ⟨10.1016/j.jmateco.2013.02.003⟩. ⟨hal-01498253⟩

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