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Stationary equilibrium in stochastic dynamic models: Semi-Markov strategies

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Abstract

We show here that a stationary equilibrium in Semi-Markov strategies exists for stochastic games under just the condition of norm continuity of the transition probability that are absolutely continuous with respect to a fixed measure on the state space. We also show that the result can be extended to the case of generalized games in which the feasible action correspondences depend on the action of the other players. We show that the generalization allows one to directly apply the results to general dynamic models.

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Acknowledgements

Some very early versions of the paper were presented at the University of Rochester, April 2016, Southern Methodist University, November 2017 and the Indian Statistical Institute, New Delhi in July 2018. The author thanks the participants for their comments. The author also thanks Paolo Barelli, Robert Becker, Marcus Berliant, Srihari Govindan, Debashis Mishra, Kevin Reffett, Santanu Roy, Jyoti Sarkar, Arunava Sen and Yeneng Sun for their detailed cpmments and discussions. The paper has been selected for presentation at the 2021 Game Theory Society World Congress. The usual disclaimer applies.

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  1. Department of Economics, Indiana University Purdue University Indianapolis(IUPUI), 425 University Blvd, Indianapolis, IN, 46202, USA

    Subir K. Chakrabarti

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  1. Subir K. Chakrabarti
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Correspondence to Subir K. Chakrabarti.

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Chakrabarti, S.K. Stationary equilibrium in stochastic dynamic models: Semi-Markov strategies. Econ Theory Bull 9, 177–194 (2021). https://doi.org/10.1007/s40505-021-00202-2

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  • DOI: https://doi.org/10.1007/s40505-021-00202-2

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