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Doing it now, later, or never

Author

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  • Cingiz, Kutay
  • Flesch, János
  • Herings, P. Jean-Jacques
  • Predtetchinski, Arkadi

Abstract

We study centipede games played by an infinite sequence of players. Following the literature on time-inconsistent preferences, we distinguish two types of decision makers, naive and sophisticated, and the corresponding solution concepts, naive ϵ-equilibrium and sophisticated ϵ-equilibrium. We show the existence of both naive and sophisticated ϵ-equilibria for each positive ϵ. Under the assumption that the payoff functions are upper semicontinuous, we furthermore show that there exist both naive and sophisticated 0-equilibria in pure strategies. We also compare the probability to stop of a naive versus a sophisticated decision maker and show that a sophisticated decision maker stops earlier.

Suggested Citation

  • Cingiz, Kutay & Flesch, János & Herings, P. Jean-Jacques & Predtetchinski, Arkadi, 2016. "Doing it now, later, or never," Games and Economic Behavior, Elsevier, vol. 97(C), pages 174-185.
    • Handle: RePEc:eee:gamebe:v:97:y:2016:i:c:p:174-185
    DOI: 10.1016/j.geb.2016.04.007
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    Cited by:

    1. János Flesch & Arkadi Predtetchinski, 2017. "A Characterization of Subgame-Perfect Equilibrium Plays in Borel Games of Perfect Information," Mathematics of Operations Research, INFORMS, vol. 42(4), pages 1162-1179, November.
    2. P. Jean-Jacques Herings & Andrey Meshalkin & Arkadi Predtetchinski, 2020. "Optimality, Equilibrium, and Curb Sets in Decision Problems Without Commitment," Dynamic Games and Applications, Springer, vol. 10(2), pages 478-492, June.
    3. Rachmilevitch, Shiran, 2020. "A note on discontinuity and approximate equilibria in games with infinitely many players," Economics Letters, Elsevier, vol. 193(C).
    4. Kutay Cingiz & János Flesch & P. Jean-Jacques Herings & Arkadi Predtetchinski, 2020. "Perfect information games where each player acts only once," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 69(4), pages 965-985, June.

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    More about this item

    Keywords

    Centipede games; Subgame perfect ϵ-equilibria; Time-inconsistent preferences; Upper semi-continuous functions; Sophisticated players; Naive players;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D60 - Microeconomics - - Welfare Economics - - - General
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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