Games with possibly naive present-biased players

Marco A. Haan () and Dominic Hauck
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Marco A. Haan: University of Groningen
Dominic Hauck: University of Groningen

Theory and Decision, 2023, vol. 95, issue 2, No 1, 173-203

Abstract: Abstract We propose a solution concept for games that are played among players with present-biased preferences that are possibly naive about their own, or about their opponent’s future time inconsistency. Our perception-perfect outcome essentially requires each player to take an action consistent with the subgame perfect equilibrium, given her perceptions concerning future types, and under the assumption that other present and future players have the same perceptions. Applications include a common pool problem and Rubinstein bargaining. When players are naive about their own time inconsistency and sophisticated about their opponent’s, the common pool problem is exacerbated, and Rubinstein bargaining breaks down completely.

Keywords: Present-biased preferences; Naivety; Common pool; Bargaining (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11238-023-09924-0

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