Some rationalizability results for dynamic games

Kenichi Akao, Tapan Mitra, Gerhard Sorger

Research output: Contribution to journalArticle

Abstract

We study the relation between dynamical systems describing the equilibrium behavior in dynamic games and those resulting from (single-player) dynamic optimization problems. More specifically, we derive conditions under which the dynamics generated by a model in one of these two classes can be rationalized by a model from the other class. We study this question under different assumptions about which fundamentals (e.g. technology, utility functions and time-preference) should be preserved by the rationalization. One interesting result is that rationalizing the equilibrium dynamics of a symmetric dynamic game by a dynamic optimization problem that preserves the technology and the utility function requires a higher degree of impatience compared to that of the players in the game.

Original languageEnglish
Pages (from-to)361-379
Number of pages19
JournalInternational Journal of Economic Theory
Volume8
Issue number4
DOIs
Publication statusPublished - 2012 Dec

Fingerprint

Optimization problem
Dynamic optimization
Rationalizability
Dynamic games
Utility function
Rationalization
Time preference
Impatience
Dynamical systems
Dynamic equilibrium

Keywords

  • C73
  • Dynamic games
  • Dynamic optimization
  • O41
  • Q50
  • Rationalizability

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

Some rationalizability results for dynamic games. / Akao, Kenichi; Mitra, Tapan; Sorger, Gerhard.

In: International Journal of Economic Theory, Vol. 8, No. 4, 12.2012, p. 361-379.

Research output: Contribution to journalArticle

Akao, Kenichi ; Mitra, Tapan ; Sorger, Gerhard. / Some rationalizability results for dynamic games. In: International Journal of Economic Theory. 2012 ; Vol. 8, No. 4. pp. 361-379.
@article{057dd8c736f34b1a843d5aa233c57f37,
title = "Some rationalizability results for dynamic games",
abstract = "We study the relation between dynamical systems describing the equilibrium behavior in dynamic games and those resulting from (single-player) dynamic optimization problems. More specifically, we derive conditions under which the dynamics generated by a model in one of these two classes can be rationalized by a model from the other class. We study this question under different assumptions about which fundamentals (e.g. technology, utility functions and time-preference) should be preserved by the rationalization. One interesting result is that rationalizing the equilibrium dynamics of a symmetric dynamic game by a dynamic optimization problem that preserves the technology and the utility function requires a higher degree of impatience compared to that of the players in the game.",
keywords = "C73, Dynamic games, Dynamic optimization, O41, Q50, Rationalizability",
author = "Kenichi Akao and Tapan Mitra and Gerhard Sorger",
year = "2012",
month = "12",
doi = "10.1111/j.1742-7363.2012.00195.x",
language = "English",
volume = "8",
pages = "361--379",
journal = "International Journal of Economic Theory",
issn = "1742-7355",
publisher = "Wiley-Blackwell",
number = "4",

}

TY - JOUR

T1 - Some rationalizability results for dynamic games

AU - Akao, Kenichi

AU - Mitra, Tapan

AU - Sorger, Gerhard

PY - 2012/12

Y1 - 2012/12

N2 - We study the relation between dynamical systems describing the equilibrium behavior in dynamic games and those resulting from (single-player) dynamic optimization problems. More specifically, we derive conditions under which the dynamics generated by a model in one of these two classes can be rationalized by a model from the other class. We study this question under different assumptions about which fundamentals (e.g. technology, utility functions and time-preference) should be preserved by the rationalization. One interesting result is that rationalizing the equilibrium dynamics of a symmetric dynamic game by a dynamic optimization problem that preserves the technology and the utility function requires a higher degree of impatience compared to that of the players in the game.

AB - We study the relation between dynamical systems describing the equilibrium behavior in dynamic games and those resulting from (single-player) dynamic optimization problems. More specifically, we derive conditions under which the dynamics generated by a model in one of these two classes can be rationalized by a model from the other class. We study this question under different assumptions about which fundamentals (e.g. technology, utility functions and time-preference) should be preserved by the rationalization. One interesting result is that rationalizing the equilibrium dynamics of a symmetric dynamic game by a dynamic optimization problem that preserves the technology and the utility function requires a higher degree of impatience compared to that of the players in the game.

KW - C73

KW - Dynamic games

KW - Dynamic optimization

KW - O41

KW - Q50

KW - Rationalizability

UR - http://www.scopus.com/inward/record.url?scp=84869826498&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84869826498&partnerID=8YFLogxK

U2 - 10.1111/j.1742-7363.2012.00195.x

DO - 10.1111/j.1742-7363.2012.00195.x

M3 - Article

VL - 8

SP - 361

EP - 379

JO - International Journal of Economic Theory

JF - International Journal of Economic Theory

SN - 1742-7355

IS - 4

ER -