Title
The Envelope Theorem For Locally Differentiable Nash Equilibria Of Finite Horizon Differential Games
Keywords
Differential games; Envelope theorem; Nash equilibria
Abstract
Envelope theorems are established for a ubiquitous class of finite horizon differential games. The theorems cover open-loop and feedback information patterns in which the corresponding Nash equilibria are locally differentiable with respect to the parameters of the game. Their relationship with extant envelope results is discussed and an application of them to a generalized capital accumulation game is provided. An important implication of the theorems is that, in general, the archetypal economic interpretation of the costate vector, namely, as the shadow value of the state vector along the Nash equilibrium, is valid for feedback Nash equilibria, but not for open-loop Nash equilibria. © 2007 Elsevier Inc. All rights reserved.
Publication Date
11-1-2007
Publication Title
Games and Economic Behavior
Volume
61
Issue
2
Number of Pages
198-224
Document Type
Article
Personal Identifier
scopus
DOI Link
https://doi.org/10.1016/j.geb.2007.01.004
Copyright Status
Unknown
Socpus ID
35148899738 (Scopus)
Source API URL
https://api.elsevier.com/content/abstract/scopus_id/35148899738
STARS Citation
Caputo, Michael R., "The Envelope Theorem For Locally Differentiable Nash Equilibria Of Finite Horizon Differential Games" (2007). Scopus Export 2000s. 6305.
https://stars.library.ucf.edu/scopus2000/6305