On the Time Consistency of Equilibria in Additively Separable Differential Games

Emanuele Bacchiega, Luca Lambertini () and Arsen Palestini ()

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: The relationship amongst state-redundancy and time consistency of differential games is investigated. A class of state-redundant games is detected, where the state dynamics and the payoff functions of all players are additively separable w.r.t. control variables. We prove that, in this class of games, open-loop Nash and degenerate feedback Stackelberg equilibria coincide, both being subgame perfect. This allows us to bypass the issue of the time inconsistency that typically affects the open-loop Stackelberg solution.

Date: 2008-03
New Economics Papers: this item is included in nep-gth
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:629

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