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Semi-Stationary Equilibrium in Leader-Follower Games

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  • Ngo Van Long
  • Koji Shimomura

Abstract

We show that in some leader-follower games, a steady-state equilibrium in quantities may exist only with non-stationary shadow prices. We call this type of equilibrium a semi-stationary steady state. Conclusions that are drawn on the assumption that a steady-state equilibrium has stationary shadow prices may turn out to be incorrect, because such a fully stationary steady state may not exist. Nous démontrons que dans certains jeux de leader-followers, un état stationnaire n'existe qu'avec des prix fictifs non-stationnaires. Ce type d'équilibre est nommé équilibre semi-stationnaire. Les conclusions basées sur l'hypothèse que les prix fictifs sont stationnaires peuvent s'avérer fausses.

Suggested Citation

  • Ngo Van Long & Koji Shimomura, 2000. "Semi-Stationary Equilibrium in Leader-Follower Games," CIRANO Working Papers 2000s-08, CIRANO.
    • Handle: RePEc:cir:cirwor:2000s-08
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    References listed on IDEAS

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    1. Kemp, Murray C & Long, Ngo Van & Shimomura, Koji, 1993. "Cyclical and Noncyclical Redistributive Taxation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(2), pages 415-429, May.
    2. Sanjay Banerji & Ngo Van Long, 2000. "Wealth Distribution, Moral Hazard, and Entrepreneurship," CIRANO Working Papers 2000s-01, CIRANO.
    3. Judd, Kenneth L., 1985. "Redistributive taxation in a simple perfect foresight model," Journal of Public Economics, Elsevier, vol. 28(1), pages 59-83, October.
    4. Xie, Danyang, 1997. "On Time Inconsistency: A Technical Issue in Stackelberg Differential Games," Journal of Economic Theory, Elsevier, vol. 76(2), pages 412-430, October.
    5. Léonard,Daniel & Long,Ngo van, 1992. "Optimal Control Theory and Static Optimization in Economics," Cambridge Books, Cambridge University Press, number 9780521331586, October.
    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, October.
    7. Marcel Boyer, 1999. "Les Expos, l'OSM, les universités, les hôpitaux : Le coût d'un déficit de 400 000 emplois au Québec = Expos, Montreal Symphony Orchestra, Universities, Hospitals: The Cost of a 400,000-Job Shortfall i," CIRANO Papers 99c-01, CIRANO.
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    Cited by:

    1. Karp, Larry & Lee, In Ho, 2000. "Time-Consistent Policies," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt94q3m5mq, Department of Agricultural & Resource Economics, UC Berkeley.
    2. Karp, Larry, 2003. "Time-Consistent Policies," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt7br39238, Department of Agricultural & Resource Economics, UC Berkeley.
    3. Karp, Larry & Lee, In Ho, 2003. "Time-consistent policies," Journal of Economic Theory, Elsevier, vol. 112(2), pages 353-364, October.
    4. Chakraborty, Bidisha & Gupta, Manash Ranjan, 2009. "Human capital, inequality, endogenous growth and educational subsidy: A theoretical analysis," Research in Economics, Elsevier, vol. 63(2), pages 77-90, June.

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    More about this item

    Keywords

    Leader-follower; dynamic games; Leader-follower; jeux dynamiques;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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