How Should Control Theory Be Used to Calculate a Time-Consistent Government Policy?

S-Tier
Journal: Review of Economic Studies
Year: 1988
Volume: 55
Issue: 2
Pages: 263-274

Authors (2)

Daniel Cohen (not in RePEc) Philippe Michel

Score contribution per author:

4.022 = (α=2.01 / 2 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We study different solutions to a simple one-dimensional linear quadratic game with a large number of private agents and a government. A "time-consistent" solution is defined as a solution to the Hamilton-Jacobi-Bellman equation, i.e. as a policy for which the government has noprecommitment capability. This solution is compared to a policy where the government has an "instantaneous" pre-commitment, i.e. an equilibrium in which the government has a period by period leadership. In both cases, we show how control theory should be applied to calculate the equilibrium and how to relate these equilibria to the differential game literature.

Technical Details

RePEc Handle
repec:oup:restud:v:55:y:1988:i:2:p:263-274.
Journal Field
General
Author Count
2
Added to Database
2026-01-25