Stackelberg solutions in macroeconometric policy models with a decentralized decision structure
Macroeconometric policy models with a decentralized decision structure can often be viewed upon as a linear quadratic N-person nonzero sum difference game with exogenous inputs, nonfeasible ideal paths and a fixed time horizon. When the decision structure is also hierarchical, the Stackelberg solution concept can be used to model the decision structure. In this paper the open loop and feedback Stackelberg strategies for such a game are derived and an application is given in the form of a small linked econometric model for the Common Market.
Key WordsL.Q.-difference games Stackelberg solutions linked macroeconometric policy models
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