Large non-cooperative games : foundations and tools

Following Schmeidler (1973) and Mas-Colell (1984), economists have typically used aggregative games with a continuum of players to model strategic environments with a large number of participants. In these games a player's payoff depends on her own strategy and on an average of the strategies of everyone in the game. Examples include corporate competition in global markets, welfare maximization in multi-period economies, strategic voting in national elections, network congestion, and environmental models of pollution or, more generally, widespread externalities. This study consists of three chapters. In Chapter 1 we unveil a weakness of the Schmeidler - Mas-Colell framework, and we develop a potential remedy that leaves the framework intact. In Chapter 2 we set the theoretical foundations for an alternative framework that is immune to the above weakness. Finally, in Chapter 3 we demonstrate how our approach accommodates types of players. We provide a number of fully worked-through examples and an appendix at the end of each chapter that includes the proofs to our propositions