Perfect Uncontrollable Differential Games

Roberto Cellini, Luca Lambertini () and G. Leitmann

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: This paper analyses the time consistency of open-loop equilibria, in the cases of Nash and Stackelberg behaviour. We define a class of games where the strong time-consistency of the open-loop Nash equilibrium associates with the time consistency of the open-loop Stackelberg equilibrium. We label these games as perfect uncontrollable . We provide one example based on a model of oligopolistic competition in advertising efforts. We also present two oligopoly games where one property holds while the other does not, so that either (i) the open-loop Nash equilibrium is subgame perfect while the stackelberg one is time inconsistent, or (ii) the open-loop Nash and Stackelberg equilibria are only weakly time consistent.

Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:509

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