# Questions tagged [dynamic-games]

Questions related to the application of game theory to situations in which actions are taken sequentially.

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### 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 ...
32 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 ...
95 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 ...
19 views

### Form of recursive formula for stochastic games of one-sided incomplete information

I'm trying to understand Proposition 1 on page 377 of this paper. The author studies zero-sum stochastic games with one-sided incomplete information: player 1 is informed of some true state $s\in S$ ...
56 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 ...
68 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 ...
150 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 ...
115 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 ...
103 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 ...
74 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 ...
312 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 ...
217 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 ...
127 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,...
76 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 ...
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 ...
79 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} &...
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)(...
60 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 ...
194 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}...
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 ...
97 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 ...
109 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(...
313 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 ...
138 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 ...
244 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 ...