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Regular version of the site

Book chapter

Adjustment Dynamics in Network Games with Stochastic Parameters

P. 65-85.
Korolev A. V.

In this paper we introduce stochastic parameters into the network game
model with production and knowledge externalities. This model was proposed
by V. Matveenko and A. Korolev as a generalization of the two-period Romer
model. Agents differ in their productivities which have deterministic and stochastic
(Wiener) components. We study the dynamics of a single agent and the dynamics
of a dyad where two agents are aggregated. We derive explicit expressions for
the dynamics of a single agent and dyad dynamics in the form of Brownian
random processes, and qualitatively analyze the solutions of stochastic equations
and systems of stochastic equations.