This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. Journal of Economic Literature
  4. June 2005
  5. Complementarities and Games: New Developments

Journal of Economic Literature

ISSN 0022-0515 (Print) | ISSN 2328-8175 (Online)

Complementarities and Games: New Developments

  • Xavier Vives
Journal of Economic Literature
vol. 43, no. 2, June 2005
(pp. 437–479)
Download Full Text PDF

Abstract

The theory of monotone comparative statics and supermodular games is presented as the appropriate tool to model complementarities. The approach, which has not yet been fully incorporated into the standard toolbox of researchers, makes the analysis intuitive and simple, helps in deriving new results and in casting new light on old ones. The paper takes stock of recent contributions and develops applications to industrial organization (oligopoly, R&D, and dynamics), finance (currency and banking crisis) and macroeconomics (adjustment and menu costs). Particular attention is devoted to Markov games and to games of incomplete information (including global games).

Citation

Vives, Xavier. 2005. "Complementarities and Games: New Developments." Journal of Economic Literature, 43 (2): 437–479. DOI: 10.1257/0022051054661558

JEL Classification

  • C72 Noncooperative Games
  • D01 Microeconomic Behavior: Underlying Principles