We develop in this paper simple geometrical methods to study local indeterminacy, bifurcations and stochastic (sunspot) equilibria near a steady state, in nonlinear two dimensional economic models. We present in particular a simple geometrical characterization of the support of stochastic...

This paper shows an endogenous Stackelberg leader-follower relation that stems purely from commitment, not from chronological order of entry. We consider a symmetric duopoly game with a priori demand uncertainty which resolves after a short term. In the beginning, each supplier is allowed to...

Two common properties of macroeconomic models are non-linearities and dynamics characterised by a non-zero number of unstable eigenvalues. Under these circumstances, a common approach is to make analysis more tractable by linearising the model in the neighbourhood of an appropriate steady-state....

The primary purpose of this exploratory empirical study is to examine the structural stability of a limited number of alternative explanatory factors of strategic change. On the basis of theoretical arguments and prior empirical evidence from two traditional perspectives, we propose an original...

This paper discusses three key elements of stochastic growth in the Schumpeterian dynamics. These elements comprise the new entry of firms in an industry, the displacement of the old technology by the new and the nonlinear impact of learning by doing on the growth of innovating firms. Each of...

Traditional game theoretic analysis proposes backward induction as a model of rational behaviour in games with perfect information. However, counterintuitive results have cast doubt on the predictive power of the theory. For example, in the Centipede Game, experimental evidence shows that...

This paper surveys some recent developments in the literature which studies continuous-time evolutionary dynamics in the context of economic modeling.

For guidance in determining which items should be included in comprehensive NDP and how they should be included, reference is often made to the linearized Hamiltonian from an optimal growth problem. The paper gives a rigorous interpretation of this procedure in terms of a money-metric utility...