Markov-Perfect Nash Equilibria in Models With a Single Capital Stock

Engelbert Dockner and Florian Wagener

No 06-07, CeNDEF Working Papers from Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance

Abstract: 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 characterize Markov perfect Nash equalibria (MPNE) for these games. These conditions result in an auxilary system of ordinary differential equations that helps us to explore stability, continuity and differentiability of MPNE. The techniques are used to derive detailed properties of MPNE 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.

Date: 2006
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Citations: View citations in EconPapers (4)

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Working Paper: Markov=Perfect Nash Equilibria in Models With a Single Capital Stock (2013)
Working Paper: Markov-perfect Nash equilibria in models with a single capital stock (2008)
Working Paper: Markov-Perfect Nash Equilibria in Models with a Single Capital Stock (2006)
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