Applying an interval method for a four agent economy analysis

Abstract

This paper presents an application of interval methods for simulation of a policy game played by four main agents of economy: profit maximizing companies active on competitive market, the monopolistic trade union (aggregated wage setters), the government and the central bank. After reduction of companies as an active agent, the resulting three agents decision system is modeled as a Stackelberg game with the central bank as the leader and trade union and government as composite followers, aggregated by means of the Nash solution. The simulation of policy game is provided. A previously developed interval method is applied to find Nash points rigorously. © 2012 Springer-Verlag.