Group for Research in Decision Analysis


Credible Linear-Incentive Equilibrium Strategies in Linear-Quadratic Differential Games


We characterize in this paper the credibility of linear-incentive equilibrium strategies for the class of linear-quadratic differential games. This class is widely used in applications of differential games in economics and management science. We derive a general condition for credibility and illustrate its use on two examples, one is a general homogenous linear-quadratic game and the second is an environmental-economics game.

, 35 pages