Approximating Nash equilibrium for production control with sticky price |
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Institution: | 1. Xi''an Jiaotong University City College, No. 8715, Shangji Road, Xi''an, 710018, Shaanxi, China;2. School of Mathematical Sciences, University of Science and Technology of China, Hefei, 230026, Anhui, China |
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Abstract: | We study a mean field game problem arising from the production control for multiple firms with price stickiness in the commodity market. The price dynamics for each firm is described as a (controlled) jump-diffusion process with mean-field interaction. Each firm aims to maximize her expectation of cumulative net profit coupled with each other through price processes. By solving the limiting control problem and a fixed-point problem, we construct an explicit approximating Nash equilibrium when the number of firms grows large. |
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Keywords: | Production output adjustment Sticky price Mean field game Approximating Nash equilibrium |
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