Dynamic IC and dynamic programming

Arbeitspapier

This paper develops a dynamic programming method when the one-stage deviation principle in the sense of mechanism design literature doesn’t hold. The commonly used dynamic programming method is valid only if the one-stage deviation principle in the sense of mechanism design literature is satisfied; it doesn't hold in every model, and the one-stage deviation principle in the sense of repeated games does hold but requires the equilibrium strategy of every player off the equilibrium path and is impractical. The dynamic programming method developed in this paper requires transfinite induction, and therefore one needs to specify the stopping times for two dimensions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 7564

Classification and Topics

• Classification: Wirtschaft
• Subject: dynamic programming ; one-stage deviation ; transfinite induction ; stopping time

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kwon, Suehyun
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/198924
• Last update: 10.03.2025, 11:44 AM CET