Template-Type: ReDIF-Paper 1.0 
Title: Markov distributional equilibrium dynamics in games with complementarities and no aggregate risk
Author-Name: Łukasz Balbus 
Author-Name: Paweł Dziewulski 
Author-Name: Kevin Reffett 
Author-Name: Łukasz Woźny 
Abstract: We present a new approach for studying equilibrium dynamics in a class of stochastic games with a continuum of players with private types and strategic complementarities. We introduce a suitable equilibrium concept, called Markov Stationary Distributional Equilibrium (MSDE), prove its existence, and provideconstructive methods for characterizing and comparing equilibrium distributional transitional dynamics. To analyze equilibrium transitions for the distributions ofprivate types, we develop an appropriate dynamic (exact) law of large numbers.Finally, we show that our models can be approximated as idealized limits of gameswith a large (but finite) number of players. We provide numerous applications of theresults including: dynamic models of growth with status concerns, social distance and paternalistic bequest with endogenous preference for consumption.
Number: 2020-052
Length: 46 pages 
Creation-Date: 2020-07
Keywords: large games, distributional equilibria, supermodular games, compara-tive dynamics, non-aggregative games, law of large numbers, social interactions
Classification-JEL: C62, C72, C73
File-URL: https://hdl.handle.net/20.500.12182/1105
File-Format: Application/pdf
DOI: 10.33119/kaewps2020052
Handle: RePEc:sgh:kaewps:2020052