A theory of regular Markov perfect equilibria in dynamic stochastic games: genericity, stability, and purification

, () and , ()
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,: Department of Economics, Harvard University
,: Department of Industrial Engineering, University of Chile
Authors registered in the RePEc Author Service: Juan F. Escobar

Theoretical Economics, 2010, vol. 5, issue 3

Abstract: This paper studies generic properties of Markov perfect equilibria in dynamic stochastic games. We show that almost all dynamic stochastic games have a finite number of locally isolated Markov perfect equilibria. These equilibria are essential and strongly stable. Moreover, they all admit purification. To establish these results, we introduce a notion of regularity for dynamic stochastic games and exploit a simple connection between normal form and dynamic stochastic games.

Keywords: Dynamic stochastic games; Markov perfect equilibrium; regularity; genericity; finiteness; strong stability; essentiality; purifiability; estimation; computation; repeated games (search for similar items in EconPapers)
JEL-codes: C61 C62 C73 (search for similar items in EconPapers)
Date: 2010-09-22
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Citations: View citations in EconPapers (48)

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Related works:
Working Paper: A Theory of Regular Markov Perfect Equilibria in Dynamic Stochastic Games: Genericity, Stability, and Purification (2008)
Working Paper: A Theory of Regular Markov Perfect Equilibria\\in Dynamic Stochastic Games: Genericity, Stability, and Purification (2008)
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