Solution mechanisms for cooperative stochastic differential games

David W.K. Yeung*

*Corresponding author for this work

Research output: Contribution to journalJournal articlepeer-review

5 Citations (Scopus)


Cooperative stochastic differential games constitute a highly complex form of decision making under uncertainty. In particular, interactions between strategic behaviors, dynamic evolution, stochastic elements and solution agreement have to be considered simultaneously. This complexity leads to great difficulties in the derivation of dynamically stable solutions. Despite urgent calls for cooperation in the global economy, the lack of formal analyses has precluded rigorous analysis of this problem. In this paper, mechanisms for the derivation of dynamically stable solutions to cooperative stochastic differential games are presented. Games with transferable payoffs and those with nontransferable payoffs are considered. Numerical illustrations are also provided.

Original languageEnglish
Pages (from-to)309-326
Number of pages18
JournalInternational Game Theory Review
Issue number2
Publication statusPublished - Jun 2006
Externally publishedYes

Scopus Subject Areas

  • Computer Science(all)
  • Business and International Management
  • Statistics, Probability and Uncertainty

User-Defined Keywords

  • Cooperative solution
  • Stochastic differential games
  • Subgame consistency


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