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A Qualitative Characterization of Symmetric Open-Loop Nash Equilibria in Discounted Infinite Horizon Differential Games

  • C. Ling
  • M. R. Caputo
Article

Abstract

The local stability, steady state comparative statics, and local comparative dynamics of symmetric open-loop Nash equilibria for the ubiquitous class of discounted infinite horizon differential games are investigated. It is shown that the functional forms and values of the parameters specified in a differential game are crucial in determining the local stability of a steady state and, in turn, the steady state comparative statics and local comparative dynamics. A simple sufficient condition for a steady state to be a local saddle point is provided. The power and reach of the results are demonstrated by applying them to two well-known differential games.

Keywords

Symmetric open-loop Nash equilibria Local stability Steady state comparative statics Local comparative dynamics 

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Copyright information

© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  1. 1.School of EconomicsSouthwestern University of Finance and EconomicsChengduChina
  2. 2.Department of EconomicsUniversity of Central FloridaOrlandoUSA

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