Markov perfect equilibria in multi-mode differential games with endogenous timing of mode transitions

Dawid H, Gezer S (2021) Universität Bielefeld Working Papers in Economics and Management; 07-2021.
Bielefeld: Bielefeld University, Department of Business Administration and Economics.

Diskussionspapier | Veröffentlicht | Englisch
 
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Abstract / Bemerkung
In this paper we study Markov-perfect equilibria (MPE) of two-player multimode di erential games with controlled state dynamics, where one player controls the transition between modes. Different types of MPE are characterized distinguishing between delay equilbria, inducing for some initial conditions mode switches after a positive finite delay, and now or never equilbria, under which, depending on the initial condition, a mode switch occurs immediately or never. These results are applied to analyze the MPE of a game capturing the dynamic interaction between two incumbent firms among which one has to decide when to extend its product range by introducing a new product. The market appeal of the new product can be (positively or negatively) in uenced over time by the competing firms through costly investments. It is shown that under a wide range of market introduction costs a now or never equilibrium co-exists with a continuum of delay equilibria, with each of them inducing a different time of product introduction.
Stichworte
multi-mode differential games; Markov-perfect-equilibrium; product innovation; optimal timing
Erscheinungsjahr
2021
Serientitel
Universität Bielefeld Working Papers in Economics and Management
Band
07-2021
Seite(n)
36
ISSN
2196-2723
Page URI
https://pub.uni-bielefeld.de/record/2952430

Zitieren

Dawid H, Gezer S. Markov perfect equilibria in multi-mode differential games with endogenous timing of mode transitions. Universität Bielefeld Working Papers in Economics and Management. Vol 07-2021. Bielefeld: Bielefeld University, Department of Business Administration and Economics; 2021.
Dawid, H., & Gezer, S. (2021). Markov perfect equilibria in multi-mode differential games with endogenous timing of mode transitions (Universität Bielefeld Working Papers in Economics and Management, 07-2021). Bielefeld: Bielefeld University, Department of Business Administration and Economics. https://doi.org/10.4119/unibi/2952430
Dawid, H., and Gezer, S. (2021). Markov perfect equilibria in multi-mode differential games with endogenous timing of mode transitions. Universität Bielefeld Working Papers in Economics and Management, 07-2021, Bielefeld: Bielefeld University, Department of Business Administration and Economics.
Dawid, H., & Gezer, S., 2021. Markov perfect equilibria in multi-mode differential games with endogenous timing of mode transitions, Universität Bielefeld Working Papers in Economics and Management, no.07-2021, Bielefeld: Bielefeld University, Department of Business Administration and Economics.
H. Dawid and S. Gezer, Markov perfect equilibria in multi-mode differential games with endogenous timing of mode transitions, Universität Bielefeld Working Papers in Economics and Management, vol. 07-2021, Bielefeld: Bielefeld University, Department of Business Administration and Economics, 2021.
Dawid, H., Gezer, S.: Markov perfect equilibria in multi-mode differential games with endogenous timing of mode transitions. Universität Bielefeld Working Papers in Economics and Management, 07-2021. Bielefeld University, Department of Business Administration and Economics, Bielefeld (2021).
Dawid, Herbert, and Gezer, Serhat. Markov perfect equilibria in multi-mode differential games with endogenous timing of mode transitions. Bielefeld: Bielefeld University, Department of Business Administration and Economics, 2021. Universität Bielefeld Working Papers in Economics and Management. 07-2021.
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2021-03-05T13:33:54Z
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