Advanced Search
MyIDEAS: Login to save this paper or follow this series

Open loop and feedback solutions to an institutional game under non-quadratic preferences

Contents:

Author Info

  • Fabien NGENDAKURIYO

    ()
    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

Until now most research in dynamic games focus on models with quadratic objective functions because of practical considerations. But in reality, all problems are not quadratic. In this paper, we solve a differential game where players have non-quadratic preferences. In particular we consider an institutional game governing a permanent interaction between civil society organizations and Government in the economy in the presence of corruption. At the first stage, we compute analytically and solve numerically the open loop and cooperative outcome of the differential game. At the second stage, we approximated analytically and solved numerically the feedback strategies at equilibrium. As results, we found that both open loop and cooperative solution are unique and stable while multiple feedback Nash equilibria should arise. As economic implications, we found that under cooperative play the magnitude of the civil monitoring effort is lower than the one in open loop game. This in turn is smaller than the magnitude of effort associated to the best feedback equilibrium. Total factor productivity effects always dominate the detrimental effect of individual effort devoted to production in almost all situations. Furthermore, institutions improve much faster under cooperative scenario than in open loop game. These results have a similar format with the ones obtained under linear quadratic differential game at least for open loop and cooperative games.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://sites.uclouvain.be/econ/DP/IRES/2010040.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 2010040.

as in new window
Length: 27
Date of creation: 30 Sep 2010
Date of revision:
Handle: RePEc:ctl:louvir:2010040

Contact details of provider:
Postal: Place Montesquieu 3, 1348 Louvain-la-Neuve (Belgium)
Fax: +32 10473945
Email:
Web page: http://www.uclouvain.be/ires
More information through EDIRC

Related research

Keywords: Institutions; corruption; civil society; dynamic games; dynamic programming; non-quadratic preferences; Markovian strategies;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ctl:louvir:2010040. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anne DAVISTER-LOGIST).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.