The Nash Equilibrium of a Fair Economy: A Non-Cooperative Game Theory Perspective

Table of Links

Abstract and 1. Introduction

1. A free and fair economy: definition, existence and uniqueness

   2.1 A free economy

   2.2 A free and fair economy

2. Equilibrium existence in a free and fair economy

   3.1 A free and fair economy as a strategic form game

   3.2 Existence of an equilibrium

3. Equilibrium efficiency in a free and fair economy

4. A free economy with social justice and inclusion

   5.1 Equilibrium existence and efficiency in a free economy with social justice

   5.2 Choosing a reference point to achieve equilibrium efficiency

5. Some applications

   6.1 Teamwork: surplus distribution in a firm

   6.2 Contagion and self-enforcing lockdown in a networked economy

   6.3 Bias in academic publishing

   6.4 Exchange economies

6. Contributions to the closely related literature

7. Conclusion and References

Appendix

3 Equilibrium existence in a free and fair economy

In a free and fair economy, agents make decisions that affect their payoff and the payoffs of other agents. One natural question that therefore arises is whether an equilibrium exists. In this section, we first show that a free economy can be modeled as a strategic form game and use the notion of pure strategy Nash equilibrium [Nash, 1951] to capture incentives and rationality. Our main result is that a free and fair economy always has a pure strategy Nash equilibrium.

3.1 A free and fair economy as a strategic form game

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:::info Authors:

(1) Ghislain H. Demeze-Jouatsa, Center for Mathematical Economics, University of Bielefeld (demeze [e-mail]);

(2) Roland Pongou, Department of Economics, University of Ottawa ([e-mail]);

(3) Jean-Baptiste Tondji, Department of Economics and Finance, The University of Texas Rio Grande Valley ([e-mail]).

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:::info This paper is available on arxiv under CC BY 4.0 DEED license.

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