Existence and Policy Effectiveness in Feedback Nash LQ-Games

Abstract

This paper illustrates how the classical theory of economic policy can profitably be used to verify some properties of the Linear Nash Feedback Equilibrium in difference LQ-games. In particular, we find that both a necessary condition for the equilibrium existence and a sufficient condition for policy ineffectiveness can be defined in the terms of the simple Tinbergen counting rule.

Keywords

• LQ-policy games, policy ineffectiveness, controllability, Linear Feedback Nash Equilibrium existence.