Weintraub, Gabriel Y.; Benkard, C. Lanier; Roy, Benjamin Van - Federal Reserve Bank of San Francisco - 2005
We propose an approximation method for analyzing Ericson and Pakes (1995)-style dynamic models of imperfect competition. We develop a simple algorithm for computing an "oblivious equilibrium," in which each firm is assumed to make decisions based only on its own state and knowledge of the long...