Let a preference ordering on a lattice be perturbed. As is well known, single crossing conditions are necessary and sufficient for a monotone reaction of the set of optimal choices from every chain. Actually, there are several interpretations of monotonicity and several corresponding single...

We consider agents playing a linear network game with strategic complementarities. We analyse the problem of a policy maker who can change the structure of the network in order to increase the aggregate efforts of the individuals and/or the sum of their utilities, given that the number of links...

This study demonstrates that the interactions of firm-level indivisible investments give rise to aggregate fluctuations without aggregate exogenous shocks. When investments are indivisible, aggregate capital is determined by the number of firms that invest. I develop a method to derive the...

Using a simple framework of Cooper and John (1988) and Cooper (1999), this paper derives the conditions under which overconfidence and underconfidence of agents lead to Pareto improvement. We show that an agent’s overconfidence in a game exhibiting strategic complementarity and positive...

In a setting where an infinite population of players interact locally and repeatedly, we study the impacts of payoff structures and network structures on contagion of a convention beyond 2×2 coordination games. First, we consider the “bilingual game”, where each player chooses one of two...

In a financial market where agents trade for short-term profit and where news can increase the uncertainty of the public belief, there are strategic complementarities in the acquisition of private information and if the cost of information is sufficient small, a continuum of equilibrium...

We examine the impact of public information in an economy where agents also have diverse private information. Our work builds on seminal contributions by Townsend (1983) and Phelps (1983), and more recently Woodford (2002), which emphasized the importance of higher-order beliefs – that is,...

One of the main subjects in the theory of economic growth is to explain regional differences among rates of growth. In this paper, we address this issue through the notion of the "underdevelopment trap". Such a trap may be the result of strategic complementarities between investment decisions...

This paper investigates the aggregate fluctuations in production and demand components when a firm's investment decision takes the form of (S,s) policies. In the field of large-dimensional non-linear dynamical systems, it is a commonly accepted view that a system of coupled non-linear...