3
votes
Textbooks addressing Markov decision processes in microeconomics/game theory/decision theory?
I guess you learned about MDP from Reinforcement Learning since RL tries to solve MDP without parameters.
For MDP without considering Microeconomics, (Indeed MDP is a decision-making process.)
"...
- 165
3
votes
Accepted
Stable outcomes of a dynamic process
Consider the dynamic system $Y_{t+1} = f(Y_t)$. In order to investigate the stability locally at $Y^\ast = f(Y^\ast)$ you can take a Taylor expansion of $Y_{t+1}$ around $Y^\ast$.
$$
\begin{align*}
&...
- 12.5k
2
votes
Accepted
Should the seed be set in forecasting returns in a MCMC
My understanding is that the standard advice is to randomly select a seed value, and then keep that seed for your entire analysis. This allows the same computer code to give identical results each ...
- 16.3k
1
vote
Accepted
Relation between Markov Perfect Nash Equilibrium and Markovian evolution of the state
Q1.
Assumptions 1 and 2 are independent of one another.
Assumption 2 is an assumption of the fundamentals of the game, the setup if you will, and have no restrictions of the solutions. Its merely a ...
- 1,924
Only top scored, non community-wiki answers of a minimum length are eligible