Markov-perfect Nash equilibria in a class of resource games

Gerhard Sorger

Economic Theory, 1997, vol. 11, issue 1, 79-100

Abstract: A general model of non-cooperating agents exploiting a renewable resource is considered. Assuming that the resource is sufficiently productive we prove that there exists a continuum of Markov-perfect Nash equilibria (MPNE). Although these equilibria lead to over-exploitation one can approximate the efficient solution by MPNE both in the state space and the payoff space. Furthermore, we derive a necessary and sufficient condition for maximal exploitation of the resource to qualify as a MPNE. This condition is satisfied if there are sufficiently many players, or if the players are sufficiently impatient, or if the capacity of each player is sufficiently high.

Date: 1997-11-17
Note: Received: November 1, 1996
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Working Paper: Markov Perfect Nash Equilibria in a Class of Resource Games (1996)
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