Degenerate Feedback and Time Consistency in Dynamic Games

Roberto Cellini, Luca Lambertini () and G. Leitmann

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: This paper analyses the time consistency of open-loop equilibria, in the cases of Nash and Stackelberg behaviour. We define a class of games where the strong time-consistency of the open-loop Nash equilibrium associates with the time consistency of the open-loop Stackelberg equilibrium. We label these games as `perfect uncontrollable' and provide two examples based on (i) a model where firms invest so as to increase consumers' reservation prices, based upon Cellini and Lambertini (CEJOR, 2003); and (ii) a model where firms compete to increase their respective market shares, based upon Leitmann and Schmitendorf (IEEE Transactions on Automatic Control, 1978).

Date: 2005
New Economics Papers: this item is included in nep-gth and nep-knm
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:535

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