Finite State Dynamic Games with Asymmetric Information: A Framework for Applied Work

Chaim Fershtman and Ariel Pakes

No 7323, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: With applied work in mind, we define an equilibrium notion for dynamic games with asymmetric information which does not require a specification for players' beliefs about their opponent types. This enables us to define equilibrium conditions which, at least in principal, are testable and can be computed using a simple reinforcement learning algorithm. We conclude with an example that endogenizes the maintenance decisions for electricity generators in a dynamic game among electric utilities in which the costs states of the generators are private information.

Keywords: Applied markov equilibrium; Dynamic games; Dynamic oligopoly (search for similar items in EconPapers)
JEL-codes: C63 C73 L13 (search for similar items in EconPapers)
Date: 2009-06
New Economics Papers: this item is included in nep-cta and nep-gth
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Finite State Dynamic Games with Asymmetric Information: A Framework for Applied Work (2009)
Working Paper: Finite State Dynamic Games with Asymmetric Information: A Framework for Applied Work (2008)
Working Paper: Finite State Dynamic Games with Asymmetric Information: A Framework for Applied Work (2005)
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