Markovian strategies with continuous and impulse controls for a differential game model of revolution

ABSTRACT

This paper is concerned with a piecewise-deterministic differential game model of political regime changes. We modify and study the model proposed by Boucekkine et al. in [7]. The original model does not allow all players to take full controls as the situation progresses. Hence, it does not lead to closed-loop strategies. We fix the problem by deriving and using a system of quasi-variational inequalities associated with the differential game, and proving a criterion for the regime change. As a result, we find Markovian strategies for all players. A numerical example for illustration of the method is given. Implications of the results to political changes in a society are discussed. Some results are extended to more general models that incorporate gradual and abrupt changes, as well as continuous and impulse controls.

KEYWORDS:

• Continuous and impulse controls
• democratization
• Markovian strategies
• piecewise deterministic differential games
• political-economy
• revolution