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The feedback equilibria of a differential game of capitalism. (English) Zbl 0722.90017
The paper deals with the workers vs. capitalists differential game originally proposed by K. Lancaster [J. Pol. Econ. 87, 1092-1109 (1973)] and later extended by M. Pohjola [J. Econ. Dyn. Control 6, 173-186 (1983)], T. Basar, A. Haurie and G. Ricci [ibid. 9, 101-125 (1985)] and others. For a discussion of the literature, see M. Pohjola [in: Dynamic games and applications in economics, 7th Annu. Conf., Econ. Dyn. Control, London 1985, Lect. Notes Econ. Math. Syst. 265, 103-133 (1986; Zbl 0586.90109)]. The paper at hand extends the work by Basar, Haurie and Ricci by addressing the question of the existence of a feedback Stackelberg equilibrium and studies the equilibrium path in more detail, for example, convergence to steady state, monotonicity and sensitivity.

MSC:
91B62 Economic growth models
91A23 Differential games (aspects of game theory)
91B40 Labor market, contracts (MSC2010)
91A40 Other game-theoretic models
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[1] Başar, Tamer; Haurie, Alain, Feedback equilibria in differential games with structural and modal uncertainties, (), 163-201
[2] Başar, Tamer; Haurie, Alain; Ricci, Gianni, On the dominance of capitalists leadership in a ‘feedback-stackelberg’ solution of a differential game model of capitalism, Journal of economic dynamics and control, 9, 101-125, (1985)
[3] Başar, Tamer; Olsder, Geert Jan, Dynamic noncooperative game theory, (1982), Academic Press London · Zbl 0479.90085
[4] Hoel, Michael, Distribution and growth as a differential game between workers and capitalists, International economic review, 19, 335-350, (1978) · Zbl 0387.90119
[5] Kemp, Murray C.; Long, Ngo Van, Union power in the long run: the case in which capitalists save optimally, IFO-studien, (1989), forthcoming
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[7] Lancaster, Kelvin, The dynamic inefficiency of capitalism, Journal of political economy, 87, 1092-1109, (1973)
[8] Manning, Richard; Shea, Koon Lam, The limit of union power in the long run, (1988), State University of New York Albany, NY · Zbl 0664.90024
[9] Pohjola, Matti, Nash and Stackelberg solutions in a differential game of capitalism, Journal of economic dynamics and control, 6, 173-186, (1983) · Zbl 0753.90014
[10] Ramsey, Frank P., A mathematical theory of saving, Economic journal, 38, 543-549, (1928)
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