A User's Guide to Solving Dynamic Stochastic Games Using the Homotopy Method

42 Pages Posted: 9 Apr 2008 Last revised: 26 Nov 2011

See all articles by Ron N. Bar (formerly Borkovsky)

Ron N. Bar (formerly Borkovsky)

Independent

Ulrich Doraszelski

Harvard University - Department of Economics; University of Pennsylvania - Business & Public Policy Department

Yaroslav (Steve) Kryukov

Northwestern University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: April 2008

Abstract

This paper provides a step-by-step guide to solving dynamic stochastic games using the homotopy method. The homotopy method facilitates exploring the equilibrium correspondence in a systematic fashion; it is especially useful in games that have multiple equilibria. We discuss the theory of the homotopy method and its implementation and present two detailed examples of dynamic stochastic games that are solved using this method.

Suggested Citation

Bar, Ron N. and Doraszelski, Ulrich and Kryukov, Yaroslav (Steve), A User's Guide to Solving Dynamic Stochastic Games Using the Homotopy Method (April 2008). Harvard Institute of Economic Research Discussion Paper No. 2155, Available at SSRN: https://ssrn.com/abstract=1117998 or http://dx.doi.org/10.2139/ssrn.1117998

Ron N. Bar

Independent ( email )

Ulrich Doraszelski (Contact Author)

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
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University of Pennsylvania - Business & Public Policy Department

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Philadelphia, PA 19104-6372
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Yaroslav (Steve) Kryukov

Northwestern University - Department of Economics ( email )

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Evanston, IL 60208
United States

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