Endogenous Market Incompleteness in Discontinuous Games

在大多数现代寡头垄断市场中，公司不仅选择数量或价格，而且从战略上设计他们的整个产品和金融合同。产品是不同功能的捆绑包；金融合同是国家或有付款的捆绑包。这是市场不完备性的一种形式：如果市场是完整的，消费者可以任意组合功能和支付。例如，可能会有一款定制的手机，它包括互联网接入和GPS导航，但没有相机或音乐播放器。然而，如果所有公司都只捆绑销售这些功能，它们在战略上就会使市场保持不完整。如果推出新的产品或合同，需求将出现中断。要理解内生市场的不完备性，有必要对非连续博弈进行分析。近年来，非连续博弈理论是一个非常活跃的研究领域。然而，以往的研究大多集中在存在结果上。相比之下，这个项目的目的是为了这类重要游戏的质量结果。其目的是了解潜在市场不完全性对竞争和福利的影响。当市场完全时，当企业数量较多时，福利最大化，就像在完全竞争下一样。当市场内在不完整时，情况就不再是这样了，因为太多的竞争破坏了提供新产品或新证券的动机。在本项目中，最优竞争程度是根据市场需求的曲率来确定的。它解决了哪些创新与消费者相关，哪些与消费者无关的问题。这为不完全市场的最优监管提供了一个新的视角。

In most modern oligopoly markets, firms choose not only quantities or prices, but design their entire products and financial contracts strategically. Products are bundles of different features; financial contracts are bundles of state-contingent payments. This is a form of market incompleteness: If markets were complete, consumers could combine features and payments arbitrarily. For example, it would be possible to have a customized cell phone that includes internet access and GPS navigation but no camera or music player. However, if all firms sell these features only as a bundle, they strategically keep the market incomplete. If novel products or contracts were introduced, demand would exhibit a discontinuity. To understand endogenous market incompleteness, it is therefore necessary to analyze a discontinuous game.The theory of discontinuous games has been a very active area of research in recent years. However, most previous research concentrates on existence results. By contrast, the purpose of this project is on qualitative results for this important class of games. The objective is to understand the effect of potential market incompleteness on competition and welfare. When markets are complete, welfare is maximized when the number of firms is large, as under perfect competition. This is no longer true when markets are endogenously incomplete because too much competition destroys the incentive for offering new products or securities. In this project, the optimal degree of competition is determined from the curvature of market demand. It addresses the question of which innovation is relevant for consumers, and which is irrelevant. This provides a new angle on the optimal regulation of incomplete markets.