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On a Nonlinear Feedback Strategy Equilibrium of a Dynamic Game

Author

Listed:
  • Kenji Fujiwara

    (School of Economics, Kwansei Gakuin University)

  • Norimichi Matsueda

    (School of Economics, Kwansei Gakuin University)

Abstract

This paper reports an intriguing property of a nonlinear feedback Nash strategy equilibrium in a dynamic game with no state variable in the payoff of each player. While the open-loop Nash and linear feedback Nash equilibria coincide with the static Cournot-Nash equilibrium in such a framework, the nonlinear feedback strategy can be properly defined and, furthermore, a particular type of the equilibrium outcomes approximates the bilateral collusion, as is originally proved by Tsutsui and Mino (1990) for a standard differential game with one state variable.

Suggested Citation

  • Kenji Fujiwara & Norimichi Matsueda, 2007. "On a Nonlinear Feedback Strategy Equilibrium of a Dynamic Game," Economics Bulletin, AccessEcon, vol. 3(8), pages 1-10.
    • Handle: RePEc:ebl:ecbull:eb-07c70003
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    File URL: http://www.accessecon.com/pubs/EB/2007/Volume3/EB-07C70003A.pdf
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    References listed on IDEAS

    as
    1. Tsutsui, Shunichi & Mino, Kazuo, 1990. "Nonlinear strategies in dynamic duopolistic competition with sticky prices," Journal of Economic Theory, Elsevier, vol. 52(1), pages 136-161, October.
    2. Dockner Engelbert J. & Van Long Ngo, 1993. "International Pollution Control: Cooperative versus Noncooperative Strategies," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 13-29, July.
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    Cited by:

    1. Halkos, George, 2009. "A Differential game approach in the case of a polluting oligopoly," MPRA Paper 23742, University Library of Munich, Germany.

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    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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