IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Piecewise Closed-Loop equilibria in diffe- rential games with regime switching strategies

Listed author(s):
  • Ngo Van Long
  • Fabien Prieur

    ()

    (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Klarizze Puzon
  • Mabel Tidball

We propose a new methodology exploring piecewise closed-loop equilibrium strategies in differential games with regime switching actions. We develop a general game with two players. Players choose an action that influences the evolution of a state variable, and decide on the switching time from one regime to another. Compared to the optimal control problem with regime switching, necessary optimality conditions are modified for the first player to switch. When choosing her optimal switching strategy, this player considers the impact of her choice on the other player’s actions and consequently on her own payoffs. In order to determine the equilibrium timing of regime changes, we derive conditions that help eliminate candidate equilibrium strategies that do not survive deviations in switching strategies. We then apply this new methodology to an exhaustible resource extraction game.

(This abstract was borrowed from another version of this item.)

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Paper provided by HAL in its series Post-Print with number hal-01549821.

as
in new window

Length:
Date of creation: 2017
Publication status: Published in Journal of Economic Dynamics and Control, Elsevier, 2017, 76, pp.264 - 284
Handle: RePEc:hal:journl:hal-01549821
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01549821
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Boucekkine, R. & Pommeret, A. & Prieur, F., 2013. "Optimal regime switching and threshold effects," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2979-2997.
  2. Boucekkine, Raouf & Saglam, Cagri & Vall Ee, Thomas, 2004. "Technology Adoption Under Embodiment: A Two-Stage Optimal Control Approach," Macroeconomic Dynamics, Cambridge University Press, vol. 8(02), pages 250-271, April.
  3. Gerlagh, Reyer & Liski, Matti, 2011. "Strategic resource dependence," Journal of Economic Theory, Elsevier, vol. 146(2), pages 699-727, March.
  4. Gaudet, Gerard & Lasserre, Pierre, 1988. "On comparing monopoly and competition in exhaustible resource exploitation," Journal of Environmental Economics and Management, Elsevier, vol. 15(4), pages 412-418, December.
  5. Derek Lemoine & Christian Traeger, 2014. "Watch Your Step: Optimal Policy in a Tipping Climate," American Economic Journal: Economic Policy, American Economic Association, vol. 6(1), pages 137-166, February.
  6. Tornell, Aaron, 1997. "Economic Growth and Decline with Endogenous Property Rights," Journal of Economic Growth, Springer, vol. 2(3), pages 219-250, September.
  7. Amir, Rabah, 1996. "Continuous Stochastic Games of Capital Accumulation with Convex Transitions," Games and Economic Behavior, Elsevier, vol. 15(2), pages 111-131, August.
  8. Valente, Simone, 2011. "Endogenous Growth, Backstop Technology Adoption, And Optimal Jumps," Macroeconomic Dynamics, Cambridge University Press, vol. 15(03), pages 293-325, June.
  9. Zemel, Amos, 2015. "Adaptation, mitigation and risk: An analytic approach," Journal of Economic Dynamics and Control, Elsevier, vol. 51(C), pages 133-147.
  10. Tahvonen, Olli & Withagen, Cees, 1996. "Optimality of irreversible pollution accumulation," Journal of Economic Dynamics and Control, Elsevier, vol. 20(9-10), pages 1775-1795.
  11. Acemoglu,Daron & Robinson,James A., 2009. "Economic Origins of Dictatorship and Democracy," Cambridge Books, Cambridge University Press, number 9780521671422, December.
  12. van der Ploeg, Frederick & Rohner, Dominic, 2012. "War and natural resource exploitation," European Economic Review, Elsevier, vol. 56(8), pages 1714-1729.
  13. Jennifer F. Reinganum, 1981. "On the Diffusion of New Technology: A Game Theoretic Approach," Review of Economic Studies, Oxford University Press, vol. 48(3), pages 395-405.
  14. Dutta, Prajit K & Sundaram, Rangarajan K, 1993. "The Tragedy of the Commons?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 3(3), pages 413-426, July.
  15. Hassan Benchekroun & Ngo Van Long, 2006. "The Curse Of Windfall Gains In A Non Renewable Resource Oligopoly ," Australian Economic Papers, Wiley Blackwell, vol. 45(2), pages 99-105, June.
  16. Raphael Amit, 1986. "Petroleum Reservoir Exploitation: Switching from Primary to Secondary Recovery," Operations Research, INFORMS, vol. 34(4), pages 534-549, August.
  17. Drew Fudenberg & Jean Tirole, 1985. "Preemption and Rent Equalization in the Adoption of New Technology," Review of Economic Studies, Oxford University Press, vol. 52(3), pages 383-401.
  18. Dockner, Engelbert J. & Van Long, Ngo & Sorger, Gerhard, 1996. "Analysis of Nash equilibria in a class of capital accumulation games," Journal of Economic Dynamics and Control, Elsevier, vol. 20(6-7), pages 1209-1235.
  19. Tomiyama, Ken, 1985. "Two-stage optimal control problems and optimality conditions," Journal of Economic Dynamics and Control, Elsevier, vol. 9(3), pages 317-337, November.
  20. Boucekkine, Raouf & Prieur, Fabien & Puzon, Klarizze, 2016. "On the timing of political regime changes in resource-dependent economies," European Economic Review, Elsevier, vol. 85(C), pages 188-207.
  21. Ngo Long, 2011. "Dynamic Games in the Economics of Natural Resources: A Survey," Dynamic Games and Applications, Springer, vol. 1(1), pages 115-148, March.
  22. Makris, Miltiadis, 2001. "Necessary conditions for infinite-horizon discounted two-stage optimal control problems," Journal of Economic Dynamics and Control, Elsevier, vol. 25(12), pages 1935-1950, December.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-01549821. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.