Abstract
This paper focuses on infinite horizon dynamic games satisfying the monotonicity property: the objective function of every player is increasing (decreasing) in the strategy of the other players. We prove that, when closed-loop strategies are allowed, the set of Nash equilibrium payoffs coincides with the set of individually rational feasible payoffs in the game which allows only open-loop strategies. The significance of this general result is demonstrated by illustrating its applicability to the study of dynamic duopolistic competition [Fershtman and Kamien (1987), Reynolds (1987)], dynamic voluntary provision of public goods [Fershtman and Nitzan (1991)] and competitive arms race [Van der Ploeg and De Zeeuw (1990)].
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
