In cooperative games over time with uncertainty, a stringent condition (subgame consistency) is required for a dynamically stable solution. In particular, a cooperative solution is subgame consistent if an extension of the solution policy to a situation with a later starting time and any feasible state brought about by prior optimal behavior would remain optimal. This paper derives an analytically tractable payoff distribution procedure leading to the realization of subgame consistent solutions in cooperative stochastic dynamic games. This is the first time that subgame consistent solutions in discrete-time dynamic games under uncertainty are provided.

Original languageEnglish
Pages (from-to)579-596
Number of pages18
JournalJournal of Optimization Theory and Applications
Volume145
Issue number3
DOIs
StatePublished - Jun 2010

    Research areas

  • Cooperative stochastic dynamic games, Dynamic stability, Subgame consistency

ID: 5093179