Working Paper

Convexity, Differential Equations, and Games

Sjur Didrik Flåm
CESifo, Munich, 2002

CESifo Working Paper No. 655

Theoretical and experimental studies of noncooperative games increasingly recognize Nash equilibrium as a limiting outcome of players‘ repeated interaction. This note, while sharing that view, illustrates and advocates combined use of convex optimization and differential equations, the purpose being to render equilibrium both plausible and stable.

Keywords: noncooperative games, Nash equilibrium, repeated play, differential equations, stability.