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Differential Game between Government and Firms: A Non-Cooperative Approach

机译:政府与企业之间的差别博弈:非合作方式

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In the paper the authors present a differential game where government and firm interact through investment and tax policy. Within an optimal control framework the firm maximizes the future stream of dividend, while the government optimizes a utility function, which depends on government consumption. Attention is paid to different solution concepts (Nash, Stackelberg and Pareto), information structures (open-loop and feedback) and their economic interpretations. Attention is also paid to the problems of time-inconsistency, credibility and reputation, which can arise by using differential games. One of the conclusions is that credibility of governmental policy may have a great influence on the market value of the firm.

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