Complementarity and diagonal dominance in discounted stochastic games

We consider discounted stochastic games characterized by monotonicity, supermodularity and diagonal dominance assumptions on the reward functions and the transition law. A thorough novel discussion of the scope and limitations of this class of games is provided. Existence of a Markov-stationary equilibrium for the infinite-horizon game, proved by Curtat, is summarized. Uniqueness of Markov equilibrium and dominance solvability of the finite-horizon game are established. In both cases, the equilibrium strategies and the corresponding value functions are nondecreasing Liptschitz-continuous functions of the state vector. Some specific economic applications are discussed.