Pure equilibria in a simple dynamic model of strategic market game

Piotr Więcek ()

Mathematical Methods of Operations Research, 2009, vol. 69, issue 1, 59-79

Abstract: We present a discrete model of two-person constant-sum dynamic strategic market game. We show that for every value of discount factor the game with discounted rewards possesses a pure stationary strategy equilibrium. Optimal strategies have some useful properties, such as Lipschitz property and symmetry. We also show value of the game to be nondecreasing both in state and discount factor. Further, for some values of discount factor, exact form of optimal strategies is found. For β less than $${2-\sqrt{2}}$$ , there is an equilibrium such that players make large bids. For β close to 1, there is an equilibrium with small bids. Similar result is obtained for the long run average reward game. Copyright Springer-Verlag 2009

Keywords: Stochastic game; Constant-sum game; Pure stationary equilibrium; Finite strategy space; Strategic market game (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1007/s00186-008-0210-4 (text/html)
Access to full text is restricted to subscribers.

Related works:
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:spr:mathme:v:69:y:2009:i:1:p:59-79

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/00186

DOI: 10.1007/s00186-008-0210-4

Access Statistics for this article

Mathematical Methods of Operations Research is currently edited by Oliver Stein

More articles in Mathematical Methods of Operations Research from Springer, Gesellschaft für Operations Research (GOR), Nederlands Genootschap voor Besliskunde (NGB)
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().