Anonymous Games with Binary Actions

In many economic decision problems the preferences of economic agents depend on the numbers or proportions of individuals choosing the same decision or other decisions. Examples include network or congestion externalities, location choices of firms, the tourist's choice of a vacation destination, the visit of public events like concerts, or the purchase of goods that are subject to fashion. In this article the relating equilibrium characterization and selection questions are formulated and solved in terms of anonymous games with a continuum of players facing a binary decision problem. Journal of Economic Literature Classification Numbers: C72, D62.