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http://hdl.handle.net/10419/22215
  
Title:The open-loop solution of the Uzawa-Lucas Model of Endogenous Growth with N agents PDF Logo
Authors:Bethmann, Dirk
Issue Date:2004
Series/Report no.:Papers / Humboldt-Universität Berlin, Center for Applied Statistics and Economics (CASE) 2004,42
Abstract:We solve an N 2 N player general-sum differential game. The optimization problem considered here is based on the Uzawa Lucas model of endogenous growth. Agents have logarithmic preferences and own two capital stocks. Since the number of players is an arbitrary fixed number N 2 N, the model?s solution is more general than the idealized concepts of the social planer?s solution with one player or the competitive equilibrium with infinitely many players. We show that the symmetric Nash equilibrium is completely described by the solution to a single ordinary differential equation. The numerical results imply that the influence of the externality along the balanced growth path decreases rapidly as the number of players increases. Off the steady state, the externality is of great importance, even for a large number of players.
Subjects:Value Function Approach
Nash-Equilibrium
Open-loop Strategies
Ordinary Differential Equation
JEL:C61
O41
C72
Document Type:Working Paper
Appears in Collections:Papers, CASE - Center for Applied Statistics and Economics, HU Berlin

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