This dissertation consists of three chapters on the topic of differential games and resource economics. The first chapter extends the envelope theorem to the class of discounted infinite horizon differential games that posses locally differentiable Nash equilibria. The theorems cover both the open-loop and feedback information structures, and are applied to a simple analytically solvable linear-quadratic game. The results show that the conventional interpretation of the costate variable as the shadow value of the state variable along the equilibrium path is only valid for feedback Nash equilibria, but not for open-loop Nash equilibria. The specific linear-quadratic structure provides some extra insights on the theorem. For example, the costate variable is shown to uniformly overestimate the shadow value of the state variable in the open-loop case, but the growth rate of the costate variable are the same as the shadow value under open-loop and feedback information structures. Chapter two investigates the qualitative properties of symmetric open-loop Nash equilibria for a ubiquitous class of discounted infinite horizon differential games. The results show that the specific functional forms and the value of parameters used in the game are crucial in determining the local asymptotic stability of steady state, the steady state comparative statics, and the local comparative dynamics. Several sufficient conditions are provided to identify a local saddle point type of steady state. An important steady state policy implication from the model is that functional forms and parameter values are not only quantitatively important to differentiate policy tools, but they are also qualitatively important. Chapter three shifts the interests to the lottery mechanism for rationing public resources. It characterizes the optimal pricing strategies of lotteries for a welfare-maximization agency. The optimal prices are shown to be positive for a wide range of individual private value distributions, suggesting that the sub-optimal pricing may result in a significant efficiency loss and that the earlier studies under zero-pricing may need to be re-examined. In addition, I identify the revenue and welfare equivalency propositions across lottery institutions. Finally, the numerical simulations strongly support the findings.
| Identifer | oai:union.ndltd.org:ucf.edu/oai:stars.library.ucf.edu:etd-5242 |
| Date | 01 January 2010 |
| Creators | Ling, Chen |
| Publisher | STARS |
| Source Sets | University of Central Florida |
| Language | English |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | Electronic Theses and Dissertations |
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