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On the Time Consistency of Equilibria in a Class of Additively Separable Differential GamesEmanuele BacchiegaUniversity of Bologna - Department of Economics Luca LambertiniUniversity of Bologna - Department of Economics Arsen PalestiniMEMOTEF - Sapienza University of Rome September 10, 2009 Abstract: A class of state-redundant differential games games is detected, where players can be partitioned into two groups, so that the state dynamics and the payoff functions of all players are additively separable w.r.t. controls and states of any two players belonging to different groups. We prove that, in this class of games, open-loop Nash and feedback Stackelberg equilibria coincide, both being strongly time consistent. This allows us to bypass the issue of the time inconsistency that typically affects the open-loop Stackelberg solution.
Number of Pages in PDF File: 16 Keywords: differential games, time consistency, additive separability JEL Classification: C73 working papers seriesDate posted: July 30, 2009 ; Last revised: September 16, 2009Suggested CitationContact Information
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