Computing Markov perfect Nash equilibria: numerical implications of a dynamic differentiated product model
AbstractIn this article we develop and illustrate a simple algorithm for computing Markov-perfect Nash equilibria. The advantage of the Markov-perfect framework is that it is flexible enough to reproduce important aspects of reality in a variety of market settings. As a result, we hope that our article and (perhaps improved) versions of the associated algorithms will eventually be a part of a tool kit that allows researchers to go back and forth between the implications of economic theory and the characteristics of alternative datasets.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Minneapolis in its series Discussion Paper / Institute for Empirical Macroeconomics with number 58.
Date of creation: 1992
Date of revision:
Other versions of this item:
- Ariel Pakes & Paul McGuire, 1994. "Computing Markov-Perfect Nash Equilibria: Numerical Implications of a Dynamic Differentiated Product Model," RAND Journal of Economics, The RAND Corporation, vol. 25(4), pages 555-589, Winter.
- Ariel Pakes & Paul McGuire, 1992. "Computing Markov Perfect Nash Equilibria: Numerical Implications of a Dynamic Differentiated Product Model," NBER Technical Working Papers 0119, National Bureau of Economic Research, Inc.
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- Taylor, John B & Uhlig, Harald, 1990.
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"Aggregation and Imperfect Competition: On the Existence of Equilibrium,"
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- Andrew Caplin & Barry Nalebuff, 1990. "Aggregation and Imperfect Competition: On the Existence of Equilibrium," Cowles Foundation Discussion Papers 937, Cowles Foundation for Research in Economics, Yale University.
- Caplin, A. & Nalebuff, B., 1989. "Aggregation And Imperfect Competition: On The Existence Of Equilibrium," Discussion Papers 1989_30, Columbia University, Department of Economics.
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