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Strategic interaction and aggregate incentives

Article
Author/s: 
Frédéric Deroïan and Mohamed Belhaj
Journal of Mathematical Economics
Issue number: 
3
Publisher: 
Elsevier
Year: 
2013
Journal pages: 
183–188
Webpage [1]
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.

Source URL:http://coalitiontheory.net/content/strategic-interaction-and-aggregate-incentives

Links
[1] http://www.sciencedirect.com/science/article/pii/S0304406813000128