Existence of Nash Equilibrium in games with a measure space of players and discontinuous payoff functions

Carmona, Guilherme and Podczeck, Konrad (2013): Existence of Nash Equilibrium in games with a measure space of players and discontinuous payoff functions.

Abstract

Balder's (2002) model of games with a measure space of players is integrated with the line of research on finite-player games with discontinuous payoff functions which follows Reny (1999). Specifically, we extend the notion of continuous security, introduced by McLennan, Monteiro and Tourky (2011) and Barelli and Meneghel (2012) for finite-players games, to games with a measure space of players and establish the existence of pure strategy Nash equilibrium for such games. A specification of our main existence result is provided which is ready to fit the needs of applications. As an illustration, we consider several optimal income tax problems in the spirit of Mirrlees (1971) and use our game-theoretic result to show the existence of an optimal income tax in each of these problems.

• Item Type: MPRA Paper
• Language: English
• Keywords: Existence of equilibrium; measure space of players; discontinuities
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games

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