- Markov-perfect Nash equilibria in models with a single capital stock
- Number of pages
- onbekend: Afdeling Kwantitatieve Economie
- CeNDEF working papers
- Volume | Edition (Serie)
- Document type
- Faculty of Economics and Business (FEB)
- Amsterdam School of Economics Research Institute (ASE-RI)
Many economic problems can be formulated as dynamic games in which strategically interacting agents choose actions that determine the current and future levels of a single capital stock. We study necessary conditions that allow us to characterise Markov perfect Nash equilibria for these games. These conditions result in an auxiliary system of ordinary differential equations that helps us to explore stability, continuity and differentiability of these equilibria. The techniques are used to derive detailed properties of Markov-perfect Nash equilibria for several games including the exploitation of a finite resource, the voluntary investment in a public capital stock, and the inter-temporal consumption of a reproductive asset.
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