Title
Envelope theorems for locally differentiable open-loop Stackelberg equilibria of finite horizon differential games
Abbreviated Journal Title
J. Econ. Dyn. Control
Keywords
Stackelberg duopoly; Envelope theorems; Differential games; Open-loop; information structure; INVESTMENT; Economics
Abstract
Envelope theorems are established for locally differentiable Stackelberg equilibria of a general class of finite horizon differential games with an open-loop information structure. It is shown that the follower's envelope results agree in form with those of any player in an open-loop Nash equilibrium, while those of the leader differ. An unanticipated conclusion is that the costate vector of the leader but not that of the follower corresponding to the state vector of the differential game may be legitimately interpreted as the shadow value of the state vector for time-inconsistent open-loop Stackelberg equilibria. Surprisingly, the same cannot be said for time-consistent open-loop Stackelberg equilibria. (C) 2010 Elsevier B.V. All rights reserved.
Journal Title
Journal of Economic Dynamics & Control
Volume
34
Issue/Number
6
Publication Date
1-1-2010
Document Type
Article
Language
English
First Page
1123
Last Page
1139
WOS Identifier
ISSN
0165-1889
Recommended Citation
"Envelope theorems for locally differentiable open-loop Stackelberg equilibria of finite horizon differential games" (2010). Faculty Bibliography 2010s. 885.
https://stars.library.ucf.edu/facultybib2010/885
Comments
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