Approximating Nash equilibrium for production control with sticky price

• Main Authors: Jiang, C. (Author), Li, T. (Author), Yu, J. (Author)
• Format: Article
• Language: English
• Published: Elsevier B.V. 2022
• Subjects: Approximating nash equilibrium; Approximating Nash equilibrium; Commodities market; Computation theory; Game problem; Game theory; Jump-diffusion process; Mean field game; Mean-field games; Nash equilibria; Price dynamics; Process control; Production control; Production output adjustment; Production outputs; Sticky price; Sticky prices
• Online Access: View Fulltext in Publisher
• ISBN: 01676377 (ISSN)
• DOI: 10.1016/j.orl.2022.04.006

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. © 2022 Elsevier B.V.