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Subgame Consistent Solutions for Cooperative Stochastic Dynamic Games

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Abstract

In cooperative games over time with uncertainty, a stringent condition (subgame consistency) is required for a dynamically stable solution. In particular, a cooperative solution is subgame consistent if an extension of the solution policy to a situation with a later starting time and any feasible state brought about by prior optimal behavior would remain optimal. This paper derives an analytically tractable payoff distribution procedure leading to the realization of subgame consistent solutions in cooperative stochastic dynamic games. This is the first time that subgame consistent solutions in discrete-time dynamic games under uncertainty are provided.

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Authors and Affiliations

  1. Department of Business Administration, Hong Kong Shue Yan University, Hong Kong, Hong Kong

    D. W. K. Yeung

  2. Centre for Game Theory, St. Petersburg State University, St. Petersburg, Russia

    D. W. K. Yeung & L. A. Petrosyan

  3. Faculty of Applied Mathematics & Control Processes, St. Petersburg State University, St. Petersburg, Russia

    L. A. Petrosyan

Authors
  1. D. W. K. Yeung
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  2. L. A. Petrosyan
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Corresponding author

Correspondence to D. W. K. Yeung.

Additional information

Communicated by George Leitmann.

This research was supported by the Research Grant Council of Hong Kong RGC Grant No. 202807 and the EU TOCSIN Project.

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Yeung, D.W.K., Petrosyan, L.A. Subgame Consistent Solutions for Cooperative Stochastic Dynamic Games. J Optim Theory Appl 145, 579–596 (2010). https://doi.org/10.1007/s10957-010-9702-5

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  • DOI: https://doi.org/10.1007/s10957-010-9702-5

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