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Discussion Paper Details

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Title: A Theory of Regular Markov Perfect Equilibria in Dynamic Stochastic Games: Genericity, Stability, and Purification

Author(s): Ulrich Doraszelski and Juan Escobar

Publication Date: April 2008

Keyword(s): computation, dynamic stochastic games, essentiality, estimation, finiteness, genericity, Markov perfect equilibrium, purifiability, regularity, repeated games and strong stability

Programme Area(s): Industrial Organization

Abstract: This paper develops a theory of regular Markov perfect equilibria in dynamic stochastic games. We show that almost all dynamic stochastic games have a finite number of locally isolated Markov perfect equilibria that are all regular. These equilibria are essential and strongly stable. Moreover, they all admit purification.

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Bibliographic Reference

Doraszelski, U and Escobar, J. 2008. 'A Theory of Regular Markov Perfect Equilibria in Dynamic Stochastic Games: Genericity, Stability, and Purification'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=6805