We describe conditions for the existence of a stationary Markovian equilibrium when total production or total endowment is a random variable. Apart from regularity assumptions, there are two crucial conditions: (i) low information—agents are ignorant of both total endowment and their own endowments when they make decisions in a given period, and (ii) proportional endowments—the endowment of each agent is in proportion, possibly random, to the total endowment. When these conditions hold, there is a stationary equilibrium. When they do not hold, such an equilibrium need not exist.
CITATION STYLE
Karatzas, I., Shubik, M., & Sudderth, W. D. (2005). Information and the existence of stationary Markovian equilibrium. In Annals of the International Society of Dynamic Games (Vol. 7, pp. 3–20). Birkhauser. https://doi.org/10.1007/0-8176-4429-6_1
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