On the saddle-point stability for a class of dynamic games (Q911492): Difference between revisions

We study the stability properties of the class of capital accumulation games introduced by \textit{Ch. Fershtman} and \textit{E. Muller} [J. Econ. Theory 33, 322-339 (1984; Zbl 0541.90006)]. Both discrete and continuous time versions are discussed. It is shown that the open-loop Nash equilibrium solutions for both games are characterized by a general saddle-point property, a result best known from the turnpike literature in optimal growth theory. In the case of zero discount rates, an even stronger result can be derived: As long as the Hessian matrix of the instantaneous profit functions has a quasi-dominant diagonal, no pure imaginary roots are possible.