European Business Schools Librarian's Group

Les Cahiers de Recherche,
HEC Paris

No 755: Uniqueness in infinitely repeated decision problems

Nicolas VIEILLE and J├Ârgen W. WEIBULL

Abstract: Dynamic 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 function should exhibit weakly increasing patience, that is, the ratio between the discount factors attached to periods t + 1 and t should be non-decreasing in t, a condition met by exponential, quasi-exponential and hyperbolic discounting.

Keywords: game theory; time preference; hyperbolic discounting; repeated decision problems

JEL-codes: C61; C72; C73; D90

15 pages, April 16, 2002

Download statistics

Questions (including download problems) about the papers in this series should be directed to Antoine Haldemann ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-02-22 16:52:55.