Finite Horizon Dynamic Games with and without a Scrap Value

Reinhard Neck (), Dmitri Blueschke and Viktoria Blueschke-Nikolaeva ()
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Viktoria Blueschke-Nikolaeva: Alpen-Adria-Universität Klagenfurt

No 9712064, Proceedings of International Academic Conferences from International Institute of Social and Economic Sciences

Abstract: In this paper, we examine the effects of scrap values on the solutions of dynamic game Problems with a finite time horizon. We show how to include a scrap value in the OPTGAME3 algorithm for the numerical calculation of solutions for dynamic games. We consider two alternative ways of including a scrap value, either only for the state variables or for both the state and control variables. Using a numerical macroeconomic model of a monetary union, we show that the introduction of a scrap value is not appropriate as a substitute for an infinite horizon in dynamic economic policy game problems.

Keywords: dynamic games; scrap value; finite horizon; Pareto solution; feedback Nash equilibrium solution (search for similar items in EconPapers)
JEL-codes: C73 E60 (search for similar items in EconPapers)
Pages: 1 page
Date: 2019-10
New Economics Papers: this item is included in nep-cmp, nep-gth, nep-mac and nep-ore
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Published in Proceedings of the Proceedings of the 51st International Academic Conference, Vienna, Oct 2019, pages 108-108

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Persistent link: https://EconPapers.repec.org/RePEc:sek:iacpro:9712064

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