Borkovsky, Ron N.; Doraszelski, Ulrich; Kryukov, Yaroslav - Carnegie Mellon University, Tepper School of Business
This paper provides a step-by-step guide to solving dynamic stochastic games using the homotopy method. The homotopy method facilitates exploring the equilibrium correspondence in a systematic fashion; it is especially useful in games that have multiple equilibria. We discuss the theory of the...