Reading List Are 261, last two lectures
I will discuss two types of dynamic games. In the first type ("Nash"), strategic agents
make decisions simultaneously in each period (each instant of time).
For example, agents extract
a common property resource.
In the second type ("asymmetric"), one group of nonstrategic
agents solve dynamic optimization problems and have rational expectations.
A strategic agent,
such as the government or a monopolist, makes decisions which affect the behavior of
nonstrategic agents.
My objective is to leave you with an idea of the types of problems that can be analyzed
and the methods that are used.
I will not have time for detailed derivations.
I’ll describe the
type of problem, try to sketch how the solution is obtained, and tell you something about the
solution.
I will try to give you "the big picture".
You can read the final set of notes on the web for an overview of the lectures.
Here is an
annotated reading list.
I.
"Nash" games:
I suggest you begin with
Kamien M and N Schwartz Dynamic Optimization
1991 North Holland part II, Section 23;
This chapter outlines the basic methods for continuous time problems
and discusses a number of
examples.
If you liked the other chapters in this book, you will probably find this one useful.
The classic paper in this field using a discrete time model is
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 Fall '06
 KARP
 Economics, Karp, common property, common property resource, Dynamic Duopolistic Competition

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