On feedback nash equilibrium and cooperation in the neoclassical growth model
AbstractFar away from any ideological point of view, our aim in this paper is to study, in a differential-game-theoretical approach, the standard growth model. Our baseline model comes from Kaitala y Pohjola (2009) based on the original ideas of Lancaster (1973). We focus on the computation of feedback strategies and we use history-dependent strategies, such as trigger strategies, in which to begin by cooperating and will cooperate as long as the rivals do, and upon observing a defection, it will immediately imply to revert to a period of punishment of specified length in which everyone plays non-cooperatively. We show that trigger strategies are employed by both groups to sustain cooperation as equilibrium. Then, we conclude that players’ memory strategies are the key for attaining the maximum economic growth.
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Bibliographic InfoArticle provided by Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia. in its journal EconoQuantum, Revista de Economia y Negocios.
Volume (Year): 9 (2012)
Issue (Month): 2 (Julio-Diciembre)
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Differential games; Nash equilibria; Neoclassical Growth model;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- D69 - Microeconomics - - Welfare Economics - - - Other
- E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- O49 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other
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