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Fixed Rules and Decision Rules: Time Consistency and Subgame Perfection

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  • Fershtman, Chaim

Abstract

The paper investigates the relationship between time consistency and subgame perfection. We show that despite some suggestions in the literature, the two are not equivalent. Subgame perfection is a stronger refinement. The paper also discusses the classes of .games in which time consistency and subgame perfection are equivalent.

Suggested Citation

  • Fershtman, Chaim, 1988. "Fixed Rules and Decision Rules: Time Consistency and Subgame Perfection," Foerder Institute for Economic Research Working Papers 275442, Tel-Aviv University > Foerder Institute for Economic Research.
    • Handle: RePEc:ags:isfiwp:275442
    DOI: 10.22004/ag.econ.275442
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    File URL: https://ageconsearch.umn.edu/record/275442/files/TEL-AVIV-FSWP-119.pdf
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    References listed on IDEAS

    as
    1. Reinganum, Jennifer F & Stokey, Nancy L, 1985. "Oligopoly Extraction of a Common Property Natural Resource: The Importance of the Period of Commitment in Dynamic Games," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(1), pages 161-173, February.
    2. Calvo, Guillermo A, 1978. "On the Time Consistency of Optimal Policy in a Monetary Economy," Econometrica, Econometric Society, vol. 46(6), pages 1411-1428, November.
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