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 language | English |
|---|---|
| Pages (from-to) | 361-379 |
| Number of pages | 19 |
| Journal | International Journal of Economic Theory |
| Volume | 8 |
| Issue number | 4 |
| DOIs | |
| Publication status | Published - 2012 Dec |
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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 journal › Article
}
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 -