CFDP 825

Sequential Games of Resource Extraction: Existence of Nash Equilibria

Author(s): 

Publication Date: March 1987

Pages: 26

Abstract: 

A general model for noncooperative extraction of common-property resource is considered. The main result is that this sequential game has a Nash equilibrium in stationary strategies. The proof is based on an infinite dimensional fixed-point theorem, and relies crucially on the topology of epi-convergence. A byproduct of the analysis is that Nash equilibrium strategies may be selected such that marginal propensities of consumption are bounded above by one.

Keywords: 

Sequential games, Dynamic programming, Fixed point theorem, Nash equilibrium, Common property, Natural resources, Common property

JEL Classification Codes:  026, 632, 213, 721