Time-Consistent Equilibria in a Differential Game Model with Time Inconsistent Preferences and Partial Cooperation

Jesús Marín-Solano ()
Additional contact information
Jesús Marín-Solano: Universitat de Barcelona

A chapter in Dynamic Games in Economics, 2014, pp 219-238 from Springer

Abstract: Abstract Differential games with time-inconsistent preferences are studied. Noncooperative Markovian Nash equilibria are described. If players can cooperate at every instant of time, time-consistent equilibria are analyzed for the problem with partial cooperation. Cooperation is partial in the sense that, although players cooperate at every moment t forming a coalition, due to the time inconsistency of the time preferences, coalitions at different times value the future in a different way, and they are treated as different agents. Time-consistent equilibria are obtained by looking for the Markovian subgame perfect equilibria in the corresponding noncooperative sequential game. The issue of dynamic consistency is then considered. In order to guarantee the sustainability of cooperation, players should bargain at every instant of time their weight in the whole coalition, and nonconstant weights are introduced. The results are illustrated with two examples: a common property resource game and a linear state pollution differential game.

Keywords: Discount Rate; Time Preference; Differential Game; Grand Coalition; Subgame Perfect Equilibrium (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
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:spr:dymchp:978-3-642-54248-0_11

Ordering information: This item can be ordered from
http://www.springer.com/9783642542480

DOI: 10.1007/978-3-642-54248-0_11

Access Statistics for this chapter

More chapters in Dynamic Modeling and Econometrics in Economics and Finance from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().