A1664
Title: Stochastic games with endogenous transitions
Authors: Reinoud Joosten - Twente University (Netherlands) [presenting]
Abstract: A stochastic game is introduced in which transition probabilites between states depend on the history of the play. We analyze this game under the limiting average reward criterion. We determine the set of jointly-convergent pure-strategy rewards which can be supported by equilibria involving threats. For expository purposes we analyze a stylized fishery game. Each period, two agents choose between catching with restraint or without. The resource is in either of two states, High or Low. Restraint is harmless to the fish, but it is a dominated action at each stage. The less restraint shown during the play, the higher the probablities that the system moves to Low. The latter may even become `absorbing temporarily', i.e. transition probabilities to High become zero temporarily.
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