A differential game between government and firms: A non-cooperative approach
type: Item
instance of: scholarly article
title: A differential game between government and firms: A non-cooperative approach
zbMATH Open document ID: 0683.90016
DOI: 10.1007/BF01234763
author: Raymond H. J. M. Gradus
published in: Journal of Economics
publication date: 1989-01-01T00:00:00Z
review text: We present a differential game where government and firm interact through investment and tax policy. Within an optimal control framework the firm maximizes the future stream of dividend, while the government optimizes an objective function, which depends on government consumption. Attention is paid to different solution concepts (Nash, Stackelberg and Pareto), information structures (open-loop and feedback) and their economic interpretations. Attention is also paid to the problems of time- inconsistency, credibility and reputation, which can arise by using differential games. One of the conclusions is that credibility of governmental policy may have a great influence on the market value of the firm.
Mathematics Subject Classification ID: 91B62
Mathematics Subject Classification ID: 91A23
Mathematics Subject Classification ID: 93C95
Mathematics Subject Classification ID: 91A40
zbMATH DE Number: 4119897
zbMATH Keywords: investment policy
zbMATH Keywords: tax policy
zbMATH Keywords: different solution concepts
zbMATH Keywords: Nash
zbMATH Keywords: Stackelberg
zbMATH Keywords: Pareto
zbMATH Keywords: information structures
zbMATH Keywords: time-inconsistency
zbMATH Keywords: credibility
zbMATH Keywords: reputation
MaRDI profile type: Publication
cites work: Tobin's Marginal q and Average q: A Neoclassical Interpretation
cites work: Distribution and Growth as a Differential Game between Workers and Capitalists
cites work: Reputation and imperfect information
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cites work: Q5531577
cites work: Discontinuous Stackelberg solutions
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description: scientific article; zbMATH DE number 4119897