On Concurrent Solutions in Differential Games
We examine solutions in which neither player is worse off from the leadership of one in a policy maker-public game. The loop model of dynamic games is used. Outcome space is dotted with equivalence classes of solutions. The Dynamic Stochastic General Equilibrium (DSGE) results and their New Keynesia...
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doaj-59fe7bc420834c8c8c24fc72115471472020-11-25T00:37:54ZengSciendoBusiness Systems Research1847-83441847-93752011-01-01211723On Concurrent Solutions in Differential GamesRomar CorreaWe examine solutions in which neither player is worse off from the leadership of one in a policy maker-public game. The loop model of dynamic games is used. Outcome space is dotted with equivalence classes of solutions. The Dynamic Stochastic General Equilibrium (DSGE) results and their New Keynesian variants might represent one category. The economy is the neighborhood of a market-clearing equilibrium with Pareto-optimal properties modulo frictions. Our interest lies in the ‘old’ Keynesian genus where the representative state is one of involuntary unemployment. Two information sets are relevant. In the first case, agents look to the past and the present. In the second, they are bound by the information provided in the present. The standard analysis pertains to DSGE models under full information. We show, in contrast, that in a situation of structural disequilibrium and feedback information, all parties are better off reneging on the social compact to achieve a superior class of solutions.http://www.degruyter.com/view/j/bsrj.2011.2.issue-1/v10305-012-0020-2/v10305-012-0020-2.xml?format=INTinformation structurestime consistencycredibility and reputation |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Romar Correa |
spellingShingle |
Romar Correa On Concurrent Solutions in Differential Games Business Systems Research information structures time consistency credibility and reputation |
author_facet |
Romar Correa |
author_sort |
Romar Correa |
title |
On Concurrent Solutions in Differential Games |
title_short |
On Concurrent Solutions in Differential Games |
title_full |
On Concurrent Solutions in Differential Games |
title_fullStr |
On Concurrent Solutions in Differential Games |
title_full_unstemmed |
On Concurrent Solutions in Differential Games |
title_sort |
on concurrent solutions in differential games |
publisher |
Sciendo |
series |
Business Systems Research |
issn |
1847-8344 1847-9375 |
publishDate |
2011-01-01 |
description |
We examine solutions in which neither player is worse off from the leadership of one in a policy maker-public game. The loop model of dynamic games is used. Outcome space is dotted with equivalence classes of solutions. The Dynamic Stochastic General Equilibrium (DSGE) results and their New Keynesian variants might represent one category. The economy is the neighborhood of a market-clearing equilibrium with Pareto-optimal properties modulo frictions. Our interest lies in the ‘old’ Keynesian genus where the representative state is one of involuntary unemployment. Two information sets are relevant. In the first case, agents look to the past and the present. In the second, they are bound by the information provided in the present. The standard analysis pertains to DSGE models under full information. We show, in contrast, that in a situation of structural disequilibrium and feedback information, all parties are better off reneging on the social compact to achieve a superior class of solutions. |
topic |
information structures time consistency credibility and reputation |
url |
http://www.degruyter.com/view/j/bsrj.2011.2.issue-1/v10305-012-0020-2/v10305-012-0020-2.xml?format=INT |
work_keys_str_mv |
AT romarcorrea onconcurrentsolutionsindifferentialgames |
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1725299070558273536 |