Valuating Payoff Streams under Unequal Discount Factors
We 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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- Drew Fudenberg & Eric Maskin, 1987.
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