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A numerical method to solve a duopolistic differential game in a closed-loop equilibrium

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De la Cruz, Jorge H. and Ivorra, Benjamin and Ramos del Olmo, Ángel Manuel (2012) A numerical method to solve a duopolistic differential game in a closed-loop equilibrium. [ nº 13, ] (Submitted)

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Abstract

In this work, we develope a numerical method to solve infinite time differential games in closed-loop equilibria. Differential games are thought to be run in dynamic decissions and competitive situations, such as marketing investments and pricing policies in a company. Closed-loop equilibria allow us to obtain strategies as a function of ourselves and our competitor. We apply our algorithm to a real data set of two competitive firms. We show how our algorithm is able to develop a different price-advertising strategy to get bigger benefits


Item Type:Working Paper or Technical Report
Uncontrolled Keywords:Differential games; closed-loop equilibrium; time series models; Lotka-Volterra models; Hamilton-Jacobi-Bellman equations; dynamic programming
Subjects:Sciences > Mathematics > Numerical analysis
Sciences > Mathematics > Operations research
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Volume:
Number:13
ID Code:29056
Deposited On:06 Mar 2015 08:51
Last Modified:12 Dec 2018 15:07

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