Noisy Stochastic Games
AbstractThis paper establishes existence of a stationary Markov perfect equilibrium in general stochastic games with noiseâ€”a component of the state that is nonatomically distributed and not directly affected by the previous periodâ€™s state and actions. Noise may be simply a payoff-irrelevant public randomization device, delivering known results on existence of correlated equilibrium as a special case. More generally, noise can take the form of shocks that enter into playersâ€™ stage payoffs and the transition probability on states. The existence result is applied to a model of industry dynamics and to a model of dynamic electoral competition.
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Bibliographic InfoPaper provided by University of Rochester - Center for Economic Research (RCER) in its series RCER Working Papers with number 570.
Length: 35 pages
Date of creation: Feb 2012
Date of revision:
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Postal: University of Rochester, Center for Economic Research, Department of Economics, Harkness 231 Rochester, New York 14627 U.S.A.
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-02-20 (All new papers)
- NEP-GTH-2012-02-20 (Game Theory)
- NEP-MIC-2012-02-20 (Microeconomics)
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