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The intrinsic comparative dynamics of locally differentiable feedback Nash equilibria of autonomous and exponentially discounted infinite horizon differential games

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  • Caputo, Michael R.
  • Ling, Chen

Abstract

The comparative dynamics of locally differentiable feedback Nash equilibria are derived for the ubiquitous class of autonomous and exponentially discounted infinite horizon differential games. The resulting refutable implications are intrinsic to the said class of differential games, and thus form their basic, empirically testable, properties. Their relationship with extant results in the optimal control theory and the static game theory is discussed. Separability conditions are identified on the instantaneous payoff and transition functions under which the intrinsic comparative dynamics collapse, in form, to those in optimal control problems. Applications of the results to capital accumulation and sticky-price games are provided.

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  • Caputo, Michael R. & Ling, Chen, 2013. "The intrinsic comparative dynamics of locally differentiable feedback Nash equilibria of autonomous and exponentially discounted infinite horizon differential games," Journal of Economic Dynamics and Control, Elsevier, vol. 37(10), pages 1982-1994.
    • Handle: RePEc:eee:dyncon:v:37:y:2013:i:10:p:1982-1994
    DOI: 10.1016/j.jedc.2013.05.008
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    Cited by:

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    2. Chen Ling & Shravan Luckraz & Bruno Antonio Pansera, 2023. "Comparative Dynamics in Differential Games: A Note on the Differentiability of Solutions," Journal of Optimization Theory and Applications, Springer, vol. 196(3), pages 1093-1105, March.

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    More about this item

    Keywords

    Comparative dynamics; Differential games; Feedback Nash equilibria;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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