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- W2908366603 abstract "Publisher SummaryThis chapter presents an algorithm to solve two-person affine-quadratic difference games, analytically, and calculate nonlinear quadratic difference games using an appropriate local linearization procedure for a time-structure relevant for economic modeling. The numerical approximation and the derivation of different solutions of the underlying affine-quadratic dynamic games are explained. The solution of the open-loop Nash game with two players is given by applying the discrete-time minimum principle to perform the minimization of each player's loss function subject to the system equations and the initial conditions. It is found that knowing the terminal condition for the vector of costate variables one can express the first-order condition of the optimization problem as a hypothetical reaction function for both players. The second optimization problem determines the optimal action of the leader, given the rational reaction of the follower as expressed by the reaction coefficient RT defined by equation. It is found that the crucial difference between the first-order condition in the Stackelberg game and the corresponding equation for the feedback Nash game is the occurrence of terms containing the reaction coefficient." @default.
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- W2908366603 date "2003-01-01" @default.
- W2908366603 modified "2023-09-23" @default.
- W2908366603 title "Optgame 1.0" @default.
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- W2908366603 doi "https://doi.org/10.1016/b978-008043858-0/50009-7" @default.
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