Generally, two facts occur with strategic complementarities and fixed prices: i) the equilibria are multiple, and ii) if the complementarities are strong, the law of demand is violated and the equilibrium is unstable. In this paper, we analyse the effect of price flexibility on these features as...

We estimate Nash equilibrium consumption externalities in household petrol budget shares. The reaction curves are obtained from an AIDS with petrol consumption externality. Using a continuous set of ten year cross sections from FES (1991-2000), we analyse the externality generated by households...