| Article ID: | iaor20105608 |
| Volume: | 58 |
| Issue: | 4-Part-2 |
| Start Page Number: | 1116 |
| End Page Number: | 1132 |
| Publication Date: | Jul 2010 |
| Journal: | Operations Research |
| Authors: | Borkovsky Ron N, Doraszelski Ulrich, Kryukov Yaroslav |
| Keywords: | homotopy method |
This paper provides a step-by-step guide to solving dynamic stochastic games using the homotopy method. The homotopy method facilitates exploring the equilibrium correspondence in a systematic fashion; it is especially useful in games that have multiple equilibria. We discuss the theory of the homotopy method and its implementation and present two detailed examples of dynamic stochastic games that are solved using this method.