A COMPLEMENTARY NOTE ON THE ISSUE OF TIME INCONSISTENCY REVISITED AS AN EXTENDED GAME

Hubert Kempf () and Grégoire Rota Graziosi

International Game Theory Review (IGTR), 2011, vol. 13, issue 04, 475-480

Abstract: Cellini and Lambertini endogenize through a timing game the moves of the central bank and the private sector in a model of monetary policy la Barro and Gordon. They find a multiplicity of equilibria, as the two Stackelberg outcomes emerge as the solutions of the timing game, with different inflation levels. By using the risk-dominance criterion to select the equilibrium we prove that there is a discontinuity in the inflation bias, depending on the inflation aversion of the private sector.

Keywords: Endogenous timing; first-second-mover advantage; monetary policy; time consistency; risk dominance; E52; E61 (search for similar items in EconPapers)
JEL-codes: B4 C0 C6 C7 D5 D7 M2 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0219198911003106
Access to full text is restricted to subscribers

Related works:
Working Paper: A complementary note on the issue of time inconsistency revisited as an extended game (2011)
Working Paper: A complementary note on the issue of time inconsistency revisited as an extended game (2011)
Working Paper: A complementary note on the issue of time inconsistency revisited as an extended game (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:igtrxx:v:13:y:2011:i:04:n:s0219198911003106

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0219198911003106

Access Statistics for this article

International Game Theory Review (IGTR) is currently edited by David W K Yeung

More articles in International Game Theory Review (IGTR) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().