Questions tagged [dynamic-games]
Questions related to the application of game theory to situations in which actions are taken sequentially.
29
questions
1
vote
1answer
34 views
Simultaneous vs Sequential Games
Is there a way to characterize the distinction between simultaneous vs sequential games? I'm trying to describe a situation where players can only take actions without knowledge of other players' ...
4
votes
1answer
107 views
Finitely repeated Prisoner’s Dilemma with switching cost
I'm doing this finitely repeated Prisoner's dilemma with switching costs but I have trouble showing the fact that $\varepsilon$ had to be $1 < \varepsilon < 2$. I do see why and that it is a ...
2
votes
0answers
19 views
Fehr-Schmidt, Ultimatum game, Subgame-Perfect Nash Equilibrium
I'm studying the different variations of the ultimatum games. I've spent some time on this following game:
Assume now that each player does not only care about the amount of money she receives, but ...
2
votes
2answers
96 views
Pure-Strategy Bayesian Nash equilibrium with general common prior
I'm doing a problem set on the subject of Bayesian Nash equilibrium. I'm asked to find the pure-strategy BNE of the following. I've calculated to matrix shown below. My first concern is if I've ...
2
votes
1answer
36 views
Estimation of point-identified Dynamic Discrete Choice models with moment inequalities
I'm trying to understand and implement in code the method in Bajari, Benkard, Levin (2007). The first stage is clear to me, as well as how to forward-simulate to obtain an estimate of the value ...
2
votes
4answers
113 views
How to achieve the best outcome by a single statement in this game?
This game is taken from Schelling's Game Theory: How to Make Decisions by R.V. Dodge, in which contenders practice brinksmanship to their own advantages. It goes as follows:
Anderson, Barnes, and ...
2
votes
1answer
73 views
Sequential Game is Extensive form game?
Dynamic, Sequential, Stochastic, Extensive form and Evolutionary games.
I know what all of them mean very roughly.
I want to clarify them.
As I understand Extensive form is a description of a ...
2
votes
1answer
105 views
Definition of subgame perfect Nash equilibrium
Take a two-stage game with complete information and simultaneous actions in each state:
(1) Player 1 and 2 simultaneously choose action $a_1\in A_1$ and
$a_2\in A_2$ respectively.
(2) Player 1 and ...
5
votes
1answer
195 views
What is the game theory of retaliatory trade tariffs?
Suppose no tariffs, or negligible tariffs, exist between nations A and B, and suddenly A introduces substantive tariffs on certain products A imports from B. In theory, this could lead to B and A ...
0
votes
1answer
165 views
Spence's Job Market Signaling Game
I have a little doubt in the Job Market Signalling Game. I am referring to A Primer in Game Theory: Gibbons, Chapter 4, Signaling Games
The attached paragraph refers to a Separating Equilibrium case ...
2
votes
1answer
127 views
Repeated Game SPNE
I approached this question in this way:
$(P_1,P_2), (R_1,R_2), (S_1,S_2)$ are the Nash Equilibria of the Stage 1 game. For the given strategy to be sustained as SPNE, there should be no way unilateral ...
1
vote
1answer
119 views
SPNE and Pareto Optimality
"The SPNE of a sequential game might not necessarily be Pareto Optimal"
I understand the definitons of Nash Equilibria and Pareto Optimality and that these are not synonymous concepts. An example in ...
-1
votes
1answer
413 views
Sequential Bertrand game with differentiated goods, how to write the strategies of firm 2 [closed]
In a Bertrand competition with differentiated goods where firms set the prices sequentially, we have the following demand functions:
q1 is quantity of goods demanded for firm 1
q2 is quantity of ...
2
votes
0answers
219 views
Subgame Perfect Equilibrium with Pure Strategies in Sequential Games [closed]
If I have a sequential game, i.e. in each node (that I will call $t$) only one player choose an strategy from a finite space of strategies, Is it true there always exist a subgame perfect equilibrium ...
2
votes
2answers
130 views
Price setting firms with cost reduction technology
As part of my undergraduate studies in Industrial Economics, I am trying to solve the following question:
Two price-setting firms are competing in a market for a homogeneous product. There are 10,...
3
votes
1answer
91 views
Extensive Form Games
( The game of “ chicken”) Two cars are driving at each other at great speeds.
If nobody changes directions, in 3 seconds they will collide and die a gruesome death,
yielding payoffs of −100 for both ...
1
vote
1answer
51 views
World as a society of interlinked multiplayer individuals
If you were to take a game-theoretic model of a world in which each individual tried to optimize their utility function / goals then how would you go about designing a computer simulation of the ...
1
vote
0answers
80 views
Dynamic dividing a dollar game
The question is a reformulation of an incomplete version.
Consider the following dynamic dividing a dollar game where agent 1 claims $x(t)$ of the dollar and agent 2 $y(t)$ (paper).
\begin{align}
&...
1
vote
0answers
64 views
Dynamic contract theory: Demarzo, Fishman(2007) optimal long term financial contracting
I am reading Demarzo, Fishman(RFS,2007). Any suggestion will be appreciated. My questions are the following:
(a)
\begin{equation*}
b_T^e(a) = \left\{\begin{array}{lll}
-e^{(\gamma-r)(...
2
votes
1answer
63 views
Terminology for “part” of extensive form game
How should I call a "part" of an extensive form game which is neither (i) a subgame, nor (ii) a stage in a repeated game?
For instance, consider the class of games constructed by "stacking" 2 ...
6
votes
2answers
196 views
Multiple equilibria: which one to select?
There are two agents $i=1,2$. Consider the following programm
\begin{align}
&V_1(x_0) := \max_u \int^\infty_0 e^{-\rho t}F_1(x(t),u(t),v(t))dt\\
&V_2(x_0) := \max_v \int^\infty_0 e^{-\rho t}...
3
votes
0answers
67 views
Converging Trajectories and Sufficiency for Optimality
(The question is loosely relatet to this thread.)
In the paper "Feedback Equilibria for a class of non-linear Differential Games" by Mäler et al. it is stated (p. 14)
In fact sufficiency is ...
5
votes
0answers
98 views
Can repeated bidding in an auction make each player's type common knowledge?
In Benjamin Edelman, Michael Ostrovsky, and Michael Schwarz(2007), there's a hand-waving argument to justify their setting as a game of complete information:
we assume that all values are common
...
7
votes
1answer
113 views
How to verify Value Function in nonzero sum two player Differential Game?
There are two agents $i=1,2$. The state $k$ is governed by $\tau_i\in[0,1]$ where
\begin{align}
\dot{k} = f(k,\tau_1,\tau_2).
\end{align}
Define the value function of player $i$ by
\begin{align}
v_i(...
9
votes
1answer
329 views
What does Battigalli really mean by “Players can not choose strategies, they can only choose actions.”?
In this video (from 7: 30 to 9: 00)on Youtube, Battigalli mentions the state of world for a simple three-legged centipede game, which, in his own word, is
"$\ldots$a description of everything ...
5
votes
2answers
141 views
Repeated games without a beginning and an end
I'm interested to know results on repeated games indexing each stage game by $\mathbb Z$ which contrast with those indexed by $\mathbb Z_+$.
It seems to me this could be quite different from repeated ...
7
votes
1answer
247 views
Models for online markets with reputation system
The only relevant model I'm aware of is Liu Qingmin(2011 R.E.S). Is there any other decent models dealing with the mechanism of online markets under reputation system, and perhaps linking to ...
5
votes
2answers
583 views
One-shot deviation principle for infinite repeated games and dynamic programming
In a context that future return is discounted by a constant parameter, one-shot deviation principle holds for both repeated games and dynamic programming.
Because, in repeated games, a one-shot ...
8
votes
1answer
279 views
Identification with BBL
In the last few years, the estimator proposed by Bajari, Benkard, and Levin ('07) for dynamic games has been gaining popularity. It is relatively straight forward and is one of the only viable options ...
