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Doing it now, later, or never

Kutay Cingiz, János Flesch, P. Jean-Jacques Herings and Arkadi Predtetchinski

Games and Economic Behavior, 2016, vol. 97, issue C, 174-185

Abstract: We study centipede games played by an infinite sequence of players. Following the literature on time-inconsistent preferences, we distinguish two types of decision makers, naive and sophisticated, and the corresponding solution concepts, naive ϵ-equilibrium and sophisticated ϵ-equilibrium. We show the existence of both naive and sophisticated ϵ-equilibria for each positive ϵ. Under the assumption that the payoff functions are upper semicontinuous, we furthermore show that there exist both naive and sophisticated 0-equilibria in pure strategies. We also compare the probability to stop of a naive versus a sophisticated decision maker and show that a sophisticated decision maker stops earlier.

Keywords: Centipede games; Subgame perfect ϵ-equilibria; Time-inconsistent preferences; Upper semi-continuous functions; Sophisticated players; Naive players (search for similar items in EconPapers)
JEL-codes: C70 D11 D60 D74 D91 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
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DOI: 10.1016/j.geb.2016.04.007

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