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On the Time Consistency of Equilibria in a Class of Additively separable Differential Games

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  • E. Bacchiega

    (University of Bologna)

  • L. Lambertini

    (University of Bologna)

  • A. Palestini

    (University of Bologna)

Abstract

A class of state-redundant differential games is detected, where players can be partitioned into two groups, so that the state dynamics and the payoff functions of all players are additively separable w.r.t. controls and states of any two players belonging to different groups. We prove that, in this class of games, open-loop Nash and feedback Stackelberg equilibria coincide, both being strongly time consistent. This allows us to bypass the issue of the time inconsistency that typically affects the open-loop Stackelberg solution.

Suggested Citation

  • E. Bacchiega & L. Lambertini & A. Palestini, 2010. "On the Time Consistency of Equilibria in a Class of Additively separable Differential Games," Journal of Optimization Theory and Applications, Springer, vol. 145(3), pages 415-427, June.
    • Handle: RePEc:spr:joptap:v:145:y:2010:i:3:d:10.1007_s10957-010-9673-6
    DOI: 10.1007/s10957-010-9673-6
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    References listed on IDEAS

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    6. Dockner,Engelbert J. & Jorgensen,Steffen & Long,Ngo Van & Sorger,Gerhard, 2000. "Differential Games in Economics and Management Science," Cambridge Books, Cambridge University Press, number 9780521637329, September.
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    2. Caputo, Michael R. & Ling, Chen, 2013. "The intrinsic comparative dynamics of locally differentiable feedback Nash equilibria of autonomous and exponentially discounted infinite horizon differential games," Journal of Economic Dynamics and Control, Elsevier, vol. 37(10), pages 1982-1994.

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