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The dynamics of the strategic capital accumulation


  • C. Figuières
  • P. Gardères
  • P. Michel
  • F. Rychen


In a two‐player capital accumulation differential game with reversible investment, wepropose a simplifying method to calculate the open‐loop Nash equilibrium and the centralizedsolution. Then we relate the two outcomes through their dynamic properties, namelythe pattern and the rate of convergence. It is demonstrated that the two outcomes share theproperty that a stock will have a non‐monotonic trajectory as a medium-run consequence ofthe differences in the initial conditions and of the heterogeneity of the agents. On the otherhand, the solutions differ in the speed of convergence of the aggregated variables, which isgreater under the centralized behavior. Copyright Kluwer Academic Publishers 1999

Suggested Citation

  • C. Figuières & P. Gardères & P. Michel & F. Rychen, 1999. "The dynamics of the strategic capital accumulation," Annals of Operations Research, Springer, vol. 88(0), pages 291-307, January.
  • Handle: RePEc:spr:annopr:v:88:y:1999:i:0:p:291-307:10.1023/a:1018990615767
    DOI: 10.1023/A:1018990615767

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    Cited by:

    1. Figuières, Charles & Gardères, Philippe & Rychen, Frédéric, 2002. "Infrastructures publiques et politiques de développement décentralisées," L'Actualité Economique, Société Canadienne de Science Economique, vol. 78(4), pages 539-570, Décembre.

    More about this item

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure


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