Symmetric Markovian games of commons with potentially sustainable endogenous growth

Zaruhi Hakobyan and Christos Koulovatianos

No 638, CFS Working Paper Series from Center for Financial Studies (CFS)

Abstract: Differential games of common resources that are governed by linear accumulation constraints have several applications. Examples include political rent-seeking groups expropriating public infrastructure, oligopolies expropriating common resources, industries using specific common infrastructure or equipment, capital-flight problems, pollution, etc. Most of the theoretical literature employs specific parametric examples of utility functions. For symmetric differential games with linear constraints and a general time-separable utility function depending only on the player's control variable, we provide an exact formula for interior symmetric Markovian-strategies. This exact solution, (a) serves as a guide for obtaining some new closed-form solutions and for characterizing multiple equilibria, and (b) implies that, if the utility function is an analytic function, then the Markovian strategies are analytic functions, too. This analyticity property facilitates the numerical computation of interior solutions of such games using polynomial projection methods and gives potential to computing modified game versions with corner solutions by employing a homotopy approach.

Keywords: differential games; endogenous growth; tragedy of the commons; Lagrange-d'Alembert equation; analytic functions (search for similar items in EconPapers)
JEL-codes: C61 C73 D74 E0 O40 O44 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-env, nep-gth, nep-mac, nep-ore and nep-upt
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Related works:
Journal Article: Symmetric Markovian Games of Commons with Potentially Sustainable Endogenous Growth (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cfswop:638

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