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The Intrinsic Comparative Dynamics of Locally Differentiable Feedback Nash Equilibria of Autonomous and Exponentially Discounted Infinite Horizon Differential Games

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  • Micahel Caputo

    ()
    (University of Central Florida, Orlando, FL)

  • Chen Ling

    ()
    (Southwestern University of Finance and Economics, Chengdu, Sichuan, China)

Abstract

The comparative dynamics of locally differentiable feedback Nash equilibria are derived for the ubiquitous class of autonomous and exponentially discounted infinite horizon differential games. The resulting refutable implications are intrinsic to the said class of differential games, and thus form their basic, empirically testable, properties. Their relationship with extant results in optimal control theory and static game theory is discussed. Separability conditions are identified on the instantaneous payoff and transition functions under which the intrinsic comparative dynamics collapse, in form, to those in optimal control problems. Applications of the results to capital accumulation and sticky-price games are provided.

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Bibliographic Info

Paper provided by University of Central Florida, Department of Economics in its series Working Papers with number 2012-03.

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Length: 29 Pages
Date of creation: Jul 2012
Date of revision:
Handle: RePEc:cfl:wpaper:2012-03

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Keywords: comparative dynamics; differential games; feedback Nash equilibria;

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