We compare steady states of open loop and locally stable Markov perfect equilibria (MPE) in a general symmetric differential game duopoly model with costs of adjustment. Strategic incentives depend on whether an increase in the state variable of a firm hurts or helps the rival and on whether...

We study a discrete time dynamic game of price competition with spatially differentiated products and price adjustment costs. We characterise the Markov perfect and the open-loop equilibrium of our game. We find that in the steady state Markov perfect equilibrium, given the presence of...

Extending some existing literature, this paper formalizes the idea that intergenerational transfers occur because people care about the "characteristics" (i.e quantity and quality) of their offspring, rather than their children's welfare per se or consumption. The model analyzes this transfer...

This paper considers the existence and computation of Markov perfect equilibria in games with a "monotone" structure. Specifically, it provides a constructive proof of the existence of Markov perfect equilibria for a class of games in which a) there is a continuum of players, b) each player has...

We study a discrete time dynamic game of price competition with spatially differentiated products and price adjustment costs. We characterise the Markov perfect and the open-loop equilibrium of our game. We find that in the steady state Markov perfect equilibrium, given the presence of...

This paper studies generic properties of 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. These equilibria are essential and strongly stable. Moreover, they all admit...

We analyze an economy populated by a sequence of generations who decide over their consumption and investment in human capital of their immediate descendants. The objective of the paper is twofold: firstly, to identify the impact of strategic interactions between consecutive generations on the...

Local interactions refer to social and economic phenomena where individuals' choices are influenced by the choices of others who are `close' to them socially or geographically. This represents a fairly accurate picture of human experience. Furthermore, since local interactions imply particular...

Local interactions refer to social and economic phenomena where individuals' choices are influenced by the choices of others who are `close' to them socially or geographically. This represents a fairly accurate picture of human experience. Furthermore, since local interactions imply particular...