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Computing Markov perfect Nash equilibria: numerical implications of a dynamic differentiated product model

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  • Paul McGuire
  • Ariel Pakes

Abstract

In this article we develop and illustrate a simple algorithm for computing Markov-perfect Nash equilibria. The advantage of the Markov-perfect framework is that it is flexible enough to reproduce important aspects of reality in a variety of market settings. As a result, we hope that our article and (perhaps improved) versions of the associated algorithms will eventually be a part of a tool kit that allows researchers to go back and forth between the implications of economic theory and the characteristics of alternative datasets.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Paul McGuire & Ariel Pakes, 1992. "Computing Markov perfect Nash equilibria: numerical implications of a dynamic differentiated product model," Discussion Paper / Institute for Empirical Macroeconomics 58, Federal Reserve Bank of Minneapolis.
    • Handle: RePEc:fip:fedmem:58
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    References listed on IDEAS

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