A Nash Equilibrium for Differential Games with Moving-horizon Strategies

Enrico Saltari, Willi Semmler and Giovanni Di Bartolomeo ()

No 197, Working Papers in Public Economics from Department of Economics and Law, Sapienza University of Roma

Abstract: Our paper aims at introducing a moving-horizon interaction in a strategic context. We assume that, in each instant of time, players can predict the effects of their actions and those of their opponents on a finite moving horizon. We define an equilibrium concept which is consistent in this setting and develop an appropriate algorithm to compute it by using nonlinear model predictive control techniques. Focusing on the length of forecasting horizon, we propose two economic interpretations for our equilibrium, based on the limited rationality and political economy literature.To provide some practical insights of our approach, we consider a debt stabilization game in a monetary union.

Keywords: Strategic interactions; Non–linear models; Model predictive control; Fiscal and monetary policy; Public debt (search for similar items in EconPapers)
JEL-codes: C61 C72 (search for similar items in EconPapers)
Pages: 25
Date: 2021-09
New Economics Papers: this item is included in nep-cba, nep-gth, nep-mac and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.dipecodir.it/wpsap/data/wp197.pdf (application/pdf)

Related works:
Journal Article: A Nash Equilibrium for Differential Games with Moving-Horizon Strategies (2022)
Working Paper: A Nash equilibrium for differential games with moving-horizon strategies (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sap:wpaper:wp197

Access Statistics for this paper

More papers in Working Papers in Public Economics from Department of Economics and Law, Sapienza University of Roma
Bibliographic data for series maintained by Luisa Giuriato ().