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Avoiding the Curse of Dimensionality in Dynamic Stochastic Games

Doraszelski, Ulrich - 2011

Continuous-time stochastic games with a finite number of states have substantial computational and conceptual advantages over the more common discrete-time model. In particular, continuous time avoids a curse of dimensionality and speeds up computations by orders of magnitude in games with more...

Persistent link: https://www.econbiz.de/10013125762

Private Politics and Public Regulation

Egorov, Georgy - 2013

We develop a dynamic game to explore the interaction between regulation and private policies, such as self-regulation … by firms and activism. Without a public regulator, the possibility of self-regulation is bad for the firm, but good for … activists who are willing to maintain a costly boycott to raise the likelihood of self-regulation. Results are reversed when the …

Persistent link: https://www.econbiz.de/10013071787

Computing Markov Perfect Nash Equilibria : Numerical Implications of a Dynamic Differentiated Product Model

Pakes, Ariel; MacGuire, Paul - 2021

This paper provides an algorithm for computing Markov Perfect Nash Equilibria (Maskin and Tirole, 1988a and b) for dynamic models that allow for heterogeneity among firms and idiosyncratic (or firm specific) sources of uncertainty. It has two purposes. To illustrate the ability of such models to...

Persistent link: https://www.econbiz.de/10013230623

Dynamic Seigniorage Theory : an Exploration

Obstfeld, Maurice - 2008

This paper shows that the optimal extraction of seigniorage implies a strong tendency for inflation to fall over time toward its socially optimal level. The point is made using a multi-period model in which (i) the government can finance deficits through bond issue or money creation, (ii)...

Persistent link: https://www.econbiz.de/10012774830

Optimal Regulation in the Presence of Reputation Concerns

Atkeson, Andrew - 2012

invest. If the market operates with spot prices, simple regulation can enhance the role of reputation to induce investment …

Persistent link: https://www.econbiz.de/10013109447

Professionals Do Not Play Minimax : Evidence from Major League Baseball and the National Football League

Kovash, Kenneth; Levitt, Steven D. - 2021

Game theory makes strong predictions about how individuals should behave in two player, zero sum games. When players follow a mixed strategy, equilibrium payoffs should be equalized across actions, and choices should be serially uncorrelated. Laboratory experiments have generated large and...

Persistent link: https://www.econbiz.de/10013224414

What Happens in the Field Stays in the Field : Exploring Whether Professionals Play Minimax in Laboratory Experiments

Levitt, Steven D. - 2010

The minimax argument represents game theory in its most elegant form: simple but with stark predictions. Although some of these predictions have been met with reasonable success in the field, experimental data have generally not provided results close to the theoretical predictions. In a...

Persistent link: https://www.econbiz.de/10013149650

Real Options with Uncertain Maturity and Competition

Miltersen, Kristian R. - 2010

We develop a new approach to dealing with real options problems with uncertain maturity. This type of situation is typical for Ramp;D investments and mine or oil exploration projects. These types of projects are characterized by significant on-going investment costs until completion. Since time...

Persistent link: https://www.econbiz.de/10012760295

How General are Risk Preferences? Choices Under Uncertainty in Different Domains

Einav, Liran - 2015

willingness to bear risk, relative to his peers, across different contexts. We do so by examining the same individuals' decisions …-general component of risk preferences …

Persistent link: https://www.econbiz.de/10013039164

Organizational Decision Making Under Uncertainty Shocks

Ballesteros, Luis - 2018

markets, such as natural disasters, terrorist attacks, and financial crises—as a problem of risk management. This is …

Persistent link: https://www.econbiz.de/10012912518