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.