Discussion paper

DP6733 A User's Guide to Solving Dynamic Stochastic Games Using the Homotopy Method

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 homotopy method and its implementation and present two detailed examples of dynamic stochastic games that are solved using this method.

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Citation

Doraszelski, U, Y Kryukov and R Borkovsky (2008), ‘DP6733 A User's Guide to Solving Dynamic Stochastic Games Using the Homotopy Method‘, CEPR Discussion Paper No. 6733. CEPR Press, Paris & London. https://cepr.org/publications/dp6733