2021/04/13 by Paulwin Graewe, Graewe, Paulwin, Ulrich Horst +3 · 1 citation
Economics, Econometrics and Finance · #Climate Change Policy and Economics #Economic theories and models #FOS: Economics and business #General Economics (econ.GN) #Stochastic processes and financial applications
paper · pdf · doi:10.48550/arxiv.2104.06152
openalex publication_date 2021/04/13 · openalex created_date 2022/07/25 · openalex updated_date 2026/07/28
We study a class of deterministic mean field games on finite and infinite\ntime horizons arising in models of optimal exploitation of exhaustible\nresources. The main characteristic of our game is an absorption constraint on\nthe players' state process. As a result of the state constraint the optimal\ntime of absorption becomes part of the equilibrium. This requires a novel\napproach when applying Pontyagin's maximum principle. We prove the existence\nand uniqueness of equilibria and solve the infinite horizon models in closed\nform. As players may drop out of the game over time, equilibrium production\nrates need not be monotone nor smooth.\n