Markov-Perfect Equilibria in Differential Games — with an Application to Climate Policy

Clicks: 1
ID: 313471
2026
Free PDF
Article Quality & Performance Metrics
Overall Quality
Not rated
Combines reader engagement with the AI quality analysis. This article has not been analysed, so there is no overall score — reader engagement is measured and shown alongside.
AI Quality Assessment
Not analyzed
Readership in this journal

Ranked #185 of 195 articles by views in The Review of Economic Studies

Most read Least read

Bar heights use a square-root scale. Only the 120 most-read articles are drawn; the journal has 195 in total.

Mint this article as an NFT
Not yet minted

Create a permanent, verifiable on-chain record of this article on the Scimatic Network. The NFT is held in your Journament account, and you can withdraw it to your own wallet at any time.

5 SUSD one-off · no wallet required
Sign in to mint
Abstract
Abstract We analyse discontinuous Markovian strategies for differential games. The best response correspondence uniquely maps almost all profiles of opponents' strategies back to the strategy space. We thus make Markov-perfect equilibria in a wide class of differential games well-behaved, resolving a long-standing open problem. We provide a readily applicable necessary and sufficient condition for best responses and Markov-perfect Nash equilibria. We demonstrate our methods in a canonical model of non-cooperative mitigation of climate change. Our approach provides novel, economically important results: we obtain the entire set of symmetric Markov-perfect equilibria, and demonstrate that the best equilibria can yield a major welfare improvement over the equilibrium which previous literature has focused on. International climate negotiations can be seen as being about coordination on good equilibria, rather than about bargaining over the limited surplus available in a dynamic prisoner's dilemma.
Reference Key
openalex_W7161132809 Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors Niko Jaakkola, Florian O O Wagener
Journal The Review of Economic Studies
Year 2026
DOI
10.1093/restud/rdag045
URL
https://doi.org/10.1093/restud/rdag045
Keywords Keywords not found

Citations

No citations found. To add a citation, contact the admin at info@scimatic.org

Comments

No comments yet. Be the first to comment on this article.