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Equilibria in Altruistic Economic Growth Models

Author

Listed:
  • Łukasz Balbus

    () (University of Zielona Góra)

  • Anna Jaśkiewicz

    () (Wrocław University of Science and Technology)

  • Andrzej S. Nowak

    () (University of Zielona Góra)

Abstract

In this paper, we consider a stochastic economic growth model in the form of an intergenerational dynamic game. Both paternalistic and non-paternalistic components are present in the model. Under very general assumptions allowing for unbounded utility functions and weakly continuous transitions, we establish the existence of Markov perfect equilibria that consist of a consumption strategy and an indirect utility function. In the pure paternalistic case, we obtain new results on equilibria. An important point of our contribution is that we make no separability assumptions on the utility functions of generations.

Suggested Citation

  • Łukasz Balbus & Anna Jaśkiewicz & Andrzej S. Nowak, 2020. "Equilibria in Altruistic Economic Growth Models," Dynamic Games and Applications, Springer, vol. 10(1), pages 1-18, March.
  • Handle: RePEc:spr:dyngam:v:10:y:2020:i:1:d:10.1007_s13235-019-00305-3
    DOI: 10.1007/s13235-019-00305-3
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    References listed on IDEAS

    as
    1. Wolfgang Leininger, 1986. "The Existence of Perfect Equilibria in a Model of Growth with Altruism between Generations," Review of Economic Studies, Oxford University Press, vol. 53(3), pages 349-367.
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    11. Epstein, Larry G & Zin, Stanley E, 1989. "Substitution, Risk Aversion, and the Temporal Behavior of Consumption and Asset Returns: A Theoretical Framework," Econometrica, Econometric Society, vol. 57(4), pages 937-969, July.
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    16. Anna Jaśkiewicz & Andrzej Nowak, 2011. "Stochastic Games with Unbounded Payoffs: Applications to Robust Control in Economics," Dynamic Games and Applications, Springer, vol. 1(2), pages 253-279, June.
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