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Protocol invariance and the timing of decisions in dynamic games

Author

Listed:
  • Doraszelski, Ulrich

    () (Wharton School, University of Pennsylvania)

  • Escobar, Juan F.

    () (Department of Industrial Engineering, University of Chile)

Abstract

We characterize a class of dynamic stochastic games that we call separable dynamic games with noisy transitions and establish that these widely used models are protocol invariant provided that periods are sufficiently short. Protocol invariance means that the set of Markov perfect equilibria is nearly the same irrespective of the order in which players are assumed to move within a period. Protocol invariance can facilitate applied work and renders the implications and predictions of a model more robust. Our class of dynamic stochastic games includes investment games, R\&D races, models of industry dynamics, dynamic public contribution games, asynchronously repeated games, and many other models from the extant literature.

Suggested Citation

  • Doraszelski, Ulrich & Escobar, Juan F., 0. "Protocol invariance and the timing of decisions in dynamic games," Theoretical Economics, Econometric Society.
  • Handle: RePEc:the:publsh:3230
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Dynamic stochastic games; timing of decisions; commitment; protocol invariance;

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • D0 - Microeconomics - - General

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