Groupe d’études et de recherche en analyse des décisions

G-87-25

Cooperative Equilibria in Discounted Stochastic Sequential Games

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This paper addresses the problem of existence and computation of cooperative equilibria of discounted stochastic sequential games. The proposed approach contains as a special case the method of Green and Porter (developed originally for repeated oligopoly games), but it is more general than the latter in the sense that it generates nontrivial equilibrium solutions for a much larger class of dynamic games. This fact is demonstrated on two examples, one concerned with duopolistic economics and the other with fishery management.

, 47 pages