scholarly journals On a special case of non-symmetric resource extraction games with unbounded payoffs

2021 ◽  
Vol 12 (1) ◽  
pp. 1-7
Author(s):  
Illia Sylenko
Keyword(s):  
Capital Accumulation ◽  
Transition Probability ◽  
Infinite Horizon ◽  
Resource Extraction ◽  
Perfect Equilibrium ◽  
Markov Perfect Equilibrium ◽  
Equilibrium Existence ◽  
Markov Perfect ◽  
Power Utilities ◽  
Geometric Random Walk

The game of resource extraction/capital accumulation is a stochastic infinite-horizon game, which models a joint utilization of a productive asset over time. The paper complements the available results on pure Markov perfect equilibrium existence in the non-symmetric game setting with an arbitrary number of agents. Moreover, we allow that the players have unbounded utilities and relax the assumption that the stochastic kernels of the transition probability must depend only on the amount of resource before consumption. This class of the game has not been examined beforehand. However, we could prove the Markov perfect equilibrium existence only in the specific case of interest. Namely, when the players have constant relative risk aversion (CRRA) power utilities and the transition law follows a geometric random walk in relation to the joint investment. The setup with the chosen characteristics is motivated by economic considerations, which makes it relevant to a certain range of real-word problems.

scholarly journals DEBT AND DEFICIT FLUCTUATIONS IN A TIME-CONSISTENT SETUP

2015 ◽  
Vol 20 (7) ◽  
pp. 1771-1794 ◽  
Author(s):  
Daryna Grechyna
Keyword(s):  
Fiscal Policy ◽  
Utility Function ◽  
Perfect Equilibrium ◽  
Markov Perfect Equilibrium ◽  
Stochastic Behavior ◽  
Ramsey Problem ◽  
Markov Perfect ◽  
Optimal Fiscal Policy ◽  
The Government ◽  
Public Bonds

This paper compares the stochastic behavior of fiscal variables under optimal fiscal policy for the cases of full commitment by the government (Ramsey problem) and no commitment by the government (focusing on differentiable Markov perfect equilibrium). It shows that the cyclical properties of fiscal variables are similar for both commitment assumptions. These conclusions are robust to two different specifications of the structure of public bonds (risk-free and state-contingent) and to different sets of the parameters. The cyclical properties of fiscal variables, regardless of commitment assumptions, can be determined by the parameters of the utility function.

Markov Perfect Equilibrium

2001 ◽  
Vol 100 (2) ◽  
pp. 191-219 ◽  
Author(s):  
Eric Maskin ◽  
Jean Tirole
Keyword(s):  
Perfect Equilibrium ◽  
Markov Perfect Equilibrium ◽  
Markov Perfect

scholarly journals Generalisations of Quasi-Hyperbolic Discounting

2021 ◽  
Author(s):  
◽  
Shanella Rajanayagam
Keyword(s):  
Exact Solution ◽  
Time Preference ◽  
Hyperbolic Discounting ◽  
Time Preferences ◽  
Perfect Equilibrium ◽  
Markov Perfect Equilibrium ◽  
Recursive Formulation ◽  
Markov Perfect

<p>This paper proposes several time preference specifications that generalise quasi-hyperbolic discounting, while retaining its analytical tractability. We define their discount functions and provide a recursive formulation of the implied lifetime payoffs. A calibration exercise demonstrates that these specifications deliver better approximations to true hyperbolic discounting. We characterise the Markov-perfect equilibrium of a general intra-personal game of agents with various time preferences. When applied to specific economic examples, our proposals yield policies that are close to those of true hyperbolic discounters. Furthermore, these approximations can be used in settings where an exact solution for hyperbolic agents is not available. Finally, we suggest further generalisations which would provide an even better fit.</p>

Markov perfect equilibrium in multi-period games between sponsor and bureau

Public Choice ◽  
1994 ◽  
Vol 79 (3-4) ◽  
pp. 257-280 ◽  
Author(s):  
Fredrik Carlsen ◽  
Kjetil Haugen
Keyword(s):  
Perfect Equilibrium ◽  
Markov Perfect Equilibrium ◽  
Markov Perfect

scholarly journals Legislative Bargaining and the Dynamics of Public Investment

2012 ◽  
Vol 106 (2) ◽  
pp. 407-429 ◽  
Author(s):  
MARCO BATTAGLINI ◽  
SALVATORE NUNNARI ◽  
THOMAS R. PALFREY
Keyword(s):  
Public Policy ◽  
Public Good ◽  
Public Investment ◽  
Infinite Horizon ◽  
Bargaining Model ◽  
Perfect Equilibrium ◽  
Voting Rules ◽  
Legislative Bargaining ◽  
The Public ◽  
Markov Perfect

We present a legislative bargaining model of the provision of a durable public good over an infinite horizon. In each period, there is a societal endowment that can either be invested in the public good or consumed. We characterize the optimal public policy, defined by the time path of investment and consumption. In a legislature representatives of each ofndistricts bargain over the current period's endowment for investment in the public good and transfers to each district. We analyze the Markov perfect equilibrium under different voting q-rules where q is the number of yes votes required for passage. We show that the efficiency of the public policy is increasing in q because higher q leads to higher investment in the public good and less pork. We examine the theoretical equilibrium predictions by conducting a laboratory experiment with five-person committees that compares three alternative voting rules: unanimity (q = 5), majority (q = 3), and dictatorship (q = 1).

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