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A User''s Guide to Solving Dynamic Stochastic Games Using the Homotopy Method

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    This paper provides a step-by-step guide to solving dynamic stochastic games using the homotopy method. The homotopy method facilitates exploring the equilibrium correspondence in a systematic fashion; it is especially useful in games that have multiple equilibria. We discuss the theory of the homotopy method and its implementation and present two detailed examples of dynamic stochastic games that are solved using this method.

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    Paper provided by Carnegie Mellon University, Tepper School of Business in its series GSIA Working Papers with number 2009-E23.

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    Handle: RePEc:cmu:gsiawp:860735799
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    Tepper School of Business, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, PA 15213-3890

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