Nonmyopia and incentives in the piecewise linearized MDP procedures with variable step-sizes

Kimitoshi Sato ()

Journal of Economic Structures, 2012, vol. 1, issue 1, 1-23

Abstract: The paper formulates a piecewise linearized version of the procedure developed by Sato (1983) and analyzes its properties. In so doing, Fujigaki’s (1981) private goods economy is extended to involve a public good; and the intertemporal game of Champsaur and Laroque is piecewise localized by dividing the time interval in their game and by using variable step-sizes to formalize the piecewise linearized procedure, called λMDP Procedure, that can possess similar desirable properties shared by continuous-time procedures. Under Nonmyopia assumption, each player’s best reply strategy at any discrete date is to reveal his/her anticipated marginal rate of substitution for a public good at the end of a current time interval of the λMDP Procedure. JEL Classification: H41. Copyright Sato; licensee Springer 2012

Keywords: incentives; nonmyopia; piecewise linearized procedures; public goods; variable step-sizes (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1186/2193-2409-1-5

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