Subgame Consistent Economic Optimization

Beschreibung

The prevalence of imperfect structures, externalities, and imperfect information in existing market systems prevents the market from serving as an efficient mechanism for resource allocation. In the presence of such failures, optimization of economic activities provides an effective remedial measure. Cooperative optimization suggests the possibility of socially optimal and individually rational solutions to decision problems involving strategic action over time; however, to guarantee that cooperation will last throughout the agreement period, the stringent condition of subgame consistency is required.

This textbook presents a treatise on subgame consistent economic optimization, developing game-theoretic optimization techniques to establish the foundation for an effective policy menu to tackle sub-optimal circumstances that the conventional market mechanism fails to resolve. Topics covered include:

* dynamic optimization;

* group optimality and individual rationality;

* time (optimal-trajectory-subgame) consistent economic optimization;

* dynamic economic optimization under uncertainty and subgame consistency;

* dynamically stable joint ventures;

* collaborative environmental management;

* discrete-time subgame consistent economic optimization. 

This is the first book to thoroughly address the topic of subgame consistent economic optimization. It will be of particular interest as a research reference for game theorists, economists, mathematicians, policy makers, and corporate planners. With ample problems and exercises, it is also a useful text for graduate students in game theory.

Various imperfections in existing market systems prevent the free market from serving as a truly efficient allocation mechanism, but optimization of economic activities provides an effective remedial measure. Cooperative optimization claims that socially optimal and individually rational solutions to decision problems involving strategic action over time exist. To ensure that cooperation will last throughout the agreement period, however, the stringent condition of subgame consistency is required.

This textbook presents a study of subgame consistent economic optimization, developing game-theoretic optimization techniques to establish the foundation for an effective policy menu to tackle the suboptimal behavior that the conventional market mechanism fails to resolve.

Autor*in

David W.K. Yeung

Themen in »Subgame Consistent Economic Optimization«

cooperative dynamic games cooperative optimization economic modeling economic optimization game-theoretic optimization stochastic dynamic games subgame consistency

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“The book is a comprehensive treatise on subgame consistent economic optimization. It is an important methodological contribution to the research on consistency and dynamic stability of cooperative strategies, developed originally by the authors. … The book is well organized and clear; moreover, it provides an extensive reference list to the relevant economic differential game literature.” (Bruno Viscolani, Mathematical Reviews, January, 2013)

“This book, authored by 2 leading international experts of game theory, provides the most comprehensive survey, possibly the only comprehensive survey, of the most important issues in subgame consistent game theory based optimisation for the serious academics and professionals in the areas of game theory and optimisation.  This is certainly the first and best book on subgame consistent economic optimization and the related game theoretic issues. This book is a major contribution to the literature on game theory, optimisation, and information economics. A very interesting and useful book!” (Dr. Sardar M. N. Islam  Ph. D., LL. B., Professor of Business, Economics and Finance, Victoria University, Australia)

“The text is truly a world-leading treatise in the field of dynamically consistent economic optimization and a Russian classic in mathematics and economics. It is a timely publication to tackle the increasingly crucial issues of consistency and dynamic stability in collaborative activities in the economic arena. The elegant mathematics developed by the authors and their [useful] applications in economics are prevalent in the analysis. The text expanded L. V. Kantorovich’s award-winning work in economic optimization significantly in the new directions of game-theoretic interaction, dynamic evolution, stochasticity, and subgame consistency.” (Vladimir Mazalov, Director of Karelian Institute of Applied Mathematical Research, Russian Academy of Sciences)

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