PL EN


2011 | 2 | 1 | 17-23
Article title

On Concurrent Solutions in Differential Games

Authors
Title variants
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Abstracts
EN
We examine solutions in which neither player is worse off from the leadership of one in a policy maker-public game. The loop model of dynamic games is used. Outcome space is dotted with equivalence classes of solutions. The Dynamic Stochastic General Equilibrium (DSGE) results and their New Keynesian variants might represent one category. The economy is the neighborhood of a market-clearing equilibrium with Pareto-optimal properties modulo frictions. Our interest lies in the ‘old’ Keynesian genus where the representative state is one of involuntary unemployment. Two information sets are relevant. In the first case, agents look to the past and the present. In the second, they are bound by the information provided in the present. The standard analysis pertains to DSGE models under full information. We show, in contrast, that in a situation of structural disequilibrium and feedback information, all parties are better off reneging on the social compact to achieve a superior class of solutions.
Publisher
Year
Volume
2
Issue
1
Pages
17-23
Physical description
Dates
published
2011-01-01
online
2012-09-19
Contributors
author
  • Department of Economics, University of Mumbai, Vidyanagari, Mumbai 400 098, India
References
  • Başar, T., Olsder, G. J. (1995). Dynamic Noncooperative Game Theory. Academic Press, London.
  • Correa, R. (1999). Dynamic Consistency under Private Information, Control and Cybernetics, 28 (2), 225-232.
  • Dow, S., Klaes, M., Montagnol, A. (2009). Risk and Uncertainty in Central Bank signals; An analysis of monetary policy committee minutes, Metroeconomica, 60 (4), 584-618.
  • Fischbocher, L. B. U. (2010). Taking the initiative. What motivates leaders? Thurgau Institute of economics and Department of Economics University of Konstantz Research Paper Series No.61.
  • Kirman, A. (2010). Walras' Unfortunate Legacy, GREQAM, Université d'Aix-Marseille, Document de travail, No. 2010-58
  • Tubaro, P. (2009). Agent-based Economics: A Methodological Appraisal, Université Paris X Nanterre, Economix Document de Travail, No. 2009-42
Document Type
Publication order reference
Identifiers
YADDA identifier
bwmeta1.element.doi-10_2478_v10305-012-0020-2
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