Dynamic Volunteer's Dilemma with Procrastinators

Yixuan Shi

Working Papers from Max Planck Institute for Tax Law and Public Finance

Abstract: We study a dynamic volunteering dilemma game in which two players choose to volunteer or wait given there have not been any volunteering actions in the past. The players can be procrastinators and the benefits of volunteering arrive later than the costs. We fully characterise the stationary Strotz-Pollak equilibria. When the cost of volunteering is suf- ficiently small or agents' present-bias parameters are sufficiently close, there always exists an equilibrium in which both players randomise. This equilibrium features stochastic delay and the delay is exacerbated if one or both agents become more present-biased. However, if the agents differ significantly in their present-bias parameters, this difference may act as a ‘natural' coordination device and the unique stationary equilibrium predicts that only the less severe procrastinator volunteers, this may result in an even quicker provision compared with the case of two exponential discounters.

Keywords: Dynamic Volunteer's dilemma, Present bias, Hyperbolic discounting, Strotz-Pollak equilibrium; Time inconsistency (search for similar items in EconPapers)
JEL-codes: D82 D83 H26 (search for similar items in EconPapers)
Pages: 38
Date: 2022-11
New Economics Papers: this item is included in nep-gth and nep-mic
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