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Conditions for Cooperation and Trading in Value-Cost Dynamic Games

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Advances in Dynamic Games

Part of the book series: Annals of the International Society of Dynamic Games ((AISDG,volume 13))

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Abstract

In value-cost dynamic games multiple agents adjust the flow and allocation of investments to action pathways that affect the value of other agents. This article determines conditions for cooperation among agents who invest to gain value from each other. These conditions are specified in a game-theoretic setting for agents that invest to realize cooperative benefits and value targets. The dynamic interaction of allocation priorities and the stability of equilibrium concepts is analyzed. One focus is to determine solutions concepts based on cost-exchange ratios and benefit-exchange ratios that represent trade-offs between the agents, as a function of the action and interaction effects of the respective action pathways. The general approach is applied to the trading between buyers and sellers of goods to determine conditions for mutually beneficial market exchange, the price of goods, and the specialization between consumers and producers.

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Notes

  1. 1.

    Capital and investment can be expressed in terms of financial units (money) but other capital resources could also be considered, such as time, labor, energy, and natural resources. The unit chosen is specific to the respective application area.

  2. 2.

    In the following the benefits of both agents are assumed to have the same units. In case of different units conversion factors apply.

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Acknowledgements

Research for this article was funded in parts by the German Science Foundation (DFG) through the Cluster of Excellence CliSAP (EXC177). The author is grateful to Harry Dankowicz for discussion of some of the issues in an earlier version of this article.

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Authors and Affiliations

  1. Institute of Geography, University of Hamburg, KlimaCampus, 20144, Hamburg, Germany

    Jürgen Scheffran

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  1. Jürgen Scheffran
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Correspondence to Jürgen Scheffran .

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Editors and Affiliations

  1. Institute of Entomology Dept. of Theoretical Ecology, Biology Centre AS CR, České Budějovice, Czech Republic

    Vlastimil Křivan

  2. GERAD, HEC Montréal, Montreal, Québec, Canada

    Georges Zaccour

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Scheffran, J. (2013). Conditions for Cooperation and Trading in Value-Cost Dynamic Games. In: Křivan, V., Zaccour, G. (eds) Advances in Dynamic Games. Annals of the International Society of Dynamic Games, vol 13. Birkhäuser, Cham. https://doi.org/10.1007/978-3-319-02690-9_9

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