ON THE COINCIDENCE OF THE FEEDBACK NASH AND STACKELBERG EQUILIBRIA IN ECONOMIC APPLICATIONS OF DIFFERENTIAL GAMES

Santiago Rubio

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: In this paper the scope of the applicability of the Stackelberg equilibrium concept in differential games is investigated. Firstly, it is showed that for a class of differential games with state-interdependence the stationary feedback Nash equilibrium coincides with the stationary feedback Stackelberg equilibrium independently of the player being the leader of the game. Secondly, sufficient conditions for obtaining the coincidence between the two equilibria are defined. A review of different economic models shows that this coincidence is going to occur for a good number of economic applications of differential games. This result appears because of the continuous-time setting in which differential games are defined. In this setting the first movement advantage of the leader may disappears and then both equilibria coincide.

Keywords: Differential Games; Stationary Feedback Nash Equilibrium; Stationary Feedback Stackelberg Equilibrium; Coincidence. (search for similar items in EconPapers)
Pages: 40 pages
Date: 2002-07
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Citations: View citations in EconPapers (3)

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http://www.ivie.es/downloads/docs/wpasad/wpasad-2002-11.pdf Fisrt version / Primera version, 2002 (application/pdf)

Related works:
Working Paper: On the Coincidence of the Feedback Nash and Stackelberg Equilibria in Economic Applications of Differential Games (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2002-11

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