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Comparative Studies on Cooperative Stochastic Differential Game and Dynamic Sequential Game of Economic Maturity

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  • Dai, Darong

Abstract

In the paper, we are encouraged to investigate the effect of game structure imposed on the minimum-time needed to economic maturity in a dynamic macroeconomic model. Indeed, we have established a basic framework for the comparative study of the cooperative stochastic differential game and dynamic sequential game of economic maturity. Moreover, in a simple stochastic growth model, closed-form solution of the minimum-time needed to economic maturity has been derived with the explicit condition, under which it is confirmed that cooperation between the representative household and the self-interested politician will definitely lead us to much faster economic maturity than that of sequential action, supplied, too. Finally, our model supports the comparative study of the minimum-time needed to economic maturity under different political- institution constraints.

Suggested Citation

  • Dai, Darong, 2012. "Comparative Studies on Cooperative Stochastic Differential Game and Dynamic Sequential Game of Economic Maturity," MPRA Paper 44339, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:44339
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    More about this item

    Keywords

    Economic maturity; Minimum-time objective; Political economy; Sequential equilibrium; Cooperative stochastic differential game;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

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