Summary.
In a (generalized) symmetric aggregative game, payoffs depend only on individual strategy and an aggregate of all strategies. Players behaving as if they were negligible would optimize taking the aggregate as given. We provide evolutionary and dynamic foundations for such behavior when the game satisfies supermodularity conditions. The results obtained are also useful to characterize evolutionarily stable strategies in a finite population.
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Received: 29 December 2002, Revised: 27 January 2004,
JEL Classification Numbers:
C72, D41, D43.
An earlier version of this paper was titled “The Evolutionary Logic of Feeling Small” and was written while the first author was affiliated with the University of Salamanca (Spain). We are indebted to Ken Binmore, Larry Blume, Luis Corchón, Georg Kirchsteiger, Paco Marhuenda, Akihiko Matsui, Diego Moreno, Manfred Nermuth, Klaus Ritzberger, Jörgen Weibull, an anonymous referee, and seminar participants at the universities of Vienna, Carlos III de Madrid, and Salamanca for many helpful comments and suggestions. Obviously, only the authors are responsible for any errors and omissions. We gratefully acknowledge financial support from the Austrian Science Fund (FWF) under Project P15281 as well as from the Austrian Exchange Service (ÖAD) and the Spanish Ministry of Education and Culture under the Spain-Austria Acciones Integradas respective projects HU02-4 and 18/2003.
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Alós-Ferrer, C., Ania, A.B. The evolutionary stability of perfectly competitive behavior. Economic Theory 26, 497–516 (2005). https://doi.org/10.1007/s00199-004-0474-8
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DOI: https://doi.org/10.1007/s00199-004-0474-8