A Note on Discontinuous Value Functions and Strategies in Affine-Quadratic Differential Games

Henrik Jensen and Ben Lockwood

Discussion Papers from University of Exeter, Department of Economics

Abstract: We present an economic example of an affine-quadratic differential game where in Markov-perfect Nash equilibrium, the value function of a player is discontinuous in the model's parameters, implying that the strategy of that player is also discontinuous, even though the data of the game (state equation and pay-offs) are continuous in the parameters. Sufficient conditions ruling out such discontinuities are presented for the general scalar case.

Keywords: GAME; THEORY (search for similar items in EconPapers)
JEL-codes: C73 (search for similar items in EconPapers)
Pages: 8 pages
Date: 1995
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Journal Article: A note on discontinuous value functions and strategies in affine-quadratic differential games (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:exe:wpaper:9514

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