DP6805 A Theory of Regular Markov Perfect Equilibria in Dynamic Stochastic Games: Genericity, Stability, and Purification
Author(s): | Ulrich Doraszelski, Juan Escobar |
Publication Date: | April 2008 |
Keyword(s): | computation, dynamic stochastic games, essentiality, estimation, finiteness, genericity, Markov perfect equilibrium, purifiability, regularity, repeated games, strong stability |
JEL(s): | C61, C62, C73 |
Programme Areas: | Industrial Organization |
Link to this Page: | cepr.org/active/publications/discussion_papers/dp.php?dpno=6805 |
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.