Strategic mistakes

• 成果类型: Article
• 署名作者: Flynn, Joel P.; Sastry, Karthik A.
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2023.105704
• 发表日期: 2023
• 关键词: Decision frictions; equilibrium; monotone comparative statics; Aggregative games; stochastic choice; Behavioral macroeconomics

摘要

To study the equilibrium implications of decision frictions, we introduce a new class of control costs in continuum-player, continuum-action games in which agents interact via an aggregate of the actions of others. The costs that we study accommodate a rich class of decision frictions, including ex post misop-timization, imperfect ex ante planning, cognitive constraints that depend endogenously on the behavior of others, and consideration sets. We provide primitive conditions such that equilibria exist, are unique, are ef-ficient, and feature monotone comparative statics for action distributions, aggregates, and the size of agents' mistakes. We apply the model to make robust equilibrium predictions in a monetary business-cycle model of price-setting with planning frictions and a model of consumption and savings during a liquidity trap when endogenous stress worsens decisions.& COPY; 2023 The Author(s). Published by Elsevier Inc. This is an open access article under the CC BY license (http://creativecommons .org /licenses /by /4 .0/).