Some rationalizability results for dynamic games

Ken Ichi 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 1

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Keywords

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

ASJC Scopus subject areas

  • Economics and Econometrics

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