Valuating Payoff Streams under Unequal Discount Factors
AbstractWe study repeated prize allocation problem when the discount factors f the agents are not equal. It is shown that the feasible set of payoffs is not well behaved. In particular, it is not convex as it contains holes and caves. The Pareto frontier is everywhere discontinuous and there is an open subset of discount factors such that the feasible set is totally disconnected.
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Bibliographic InfoPaper provided by Aboa Centre for Economics in its series Discussion Papers with number 16.
Date of creation: Jun 2007
Date of revision:
payoffs; differentiated discount factor; repeated games;
Other versions of this item:
- Salonen, Hannu & Vartiainen, Hannu, 2008. "Valuating payoff streams under unequal discount factors," Economics Letters, Elsevier, vol. 99(3), pages 595-598, June.
- C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
- C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
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