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An approximate dynamic programming approach to solving dynamic oligopoly models.

In this article, we introduce a new method to approximate Markov perfect equilibrium in large-scale Ericson and Pakes (1995)-style dynamic oligopoly models that are not amenable to exact solution due to the curse of dimensionality. The method is based on an algorithm that iterates an approximate bes...

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Published in:RAND Journal of Economics (Wiley-Blackwell) Vol. 43; no. 2; pp. 253 - 283
Main Authors: Farias, Vivek, Saure, Denis, Weintraub, Gabriel Y.
Format: Article
Published: Wiley-Blackwell Summer2012
Subjects:
Oligopolies
Dynamic programming
Mathematical models
Algorithms
Approximation theory
Dimension reduction (Statistics)
Mathematical functions
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