| Reference : Uncertainty-driven symmetry-breaking and stochastic stability in a generic differenti... |
| E-prints/Working papers : Already available on another site | |||
| Business & economic sciences : Quantitative methods in economics & management | |||
| Sustainable Development | |||
| http://hdl.handle.net/10993/47511 | |||
| Uncertainty-driven symmetry-breaking and stochastic stability in a generic differential game of lobbying | |
| English | |
| Boucekkine, Raouf [Aix-Marseille University] | |
| Prieur, Fabien [] | |
| Ruan, Weihua [] | |
Zou, Benteng  [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Department of Economics and Management (DEM) >] | |
| 2021 | |
| No | |
| [en] stochastic di erential games ; stochastic stability ; social cost of lobbying | |
| [en] We study a 2-players stochastic differential game of lobbying. Players have opposite
interests; at any date, each player invests in lobbying activities to alter the legislation, the continuous state variable of the game, in her own benefit. The payoffs are quadratic and uncertainty is driven by a Wiener process. We prove that while a symmetric Markov Perfect Equilibrium (MPE) always exists, (two) asymmetric MPE only emerge when uncertainty is large enough. In the latter case, the legislative state converges to a stationary invariant distribution. We fully characterize existence and stochastic stability of the legislative state for both types of MPE. We finally study the implications for rent dissipation asymptotically. We show in particular that while the average rent dissipation is lower with asymmetric equilibria relative to the symmetric, the former yield larger losses at the most likely asymptotic states for large enough but moderate uncertainty. | |
| Researchers ; General public | |
| http://hdl.handle.net/10993/47511 | |
| https://wwwfr.uni.lu/recherche/fdef/dem/publications/discussion_papers |
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