Uniqueness in Infinitely Repeated Decision Problems
AbstractDynamic decision-making without commitment is usually modelled as a game between the current and future selves of the decision maker. It has been observed that if the time-horizon is infinite, then such games may have multiple subgame-perfect equilibrium solutions. We provide a sufficient condition for uniqueness in a class of such games, namely infinitely repeated decision problems with discounting. The condition is two-fold: the range of possible utility levels in the decision problem should be bounded from below, and the discount factor between successive periods should be non-decreasing over time, a condition met by exponential, quasi-exponential and hyperbolic discounting.
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Bibliographic InfoPaper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 577.
Length: 15 pages
Date of creation: 16 Apr 2002
Date of revision:
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More information through EDIRC
Game Theory; Time Preference; Hyperbolic Discounting; Repeated Decision Problems;
Other versions of this item:
- VIEILLE, Nicolas & WEIBULL, Jörgen W., 2002. "Uniqueness in infinitely repeated decision problems," Les Cahiers de Recherche 755, HEC Paris.
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- D90 - Microeconomics - - Intertemporal Choice and Growth - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-05-07 (All new papers)
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