Uniqueness in Infinitely Repeated Decision Problems

Nicolas Vieille () and Jörgen Weibull

No 577, Working Paper Series from Research Institute of Industrial Economics

Abstract: Dynamic decision-making without commitment is usually modelled as a game between the current and future selves of the decision maker. It has been observed that if the time-horizon is infinite, then such games may have multiple subgame-perfect equilibrium solutions. We provide a sufficient condition for uniqueness in a class of such games, namely infinitely repeated decision problems with discounting. The condition is two-fold: the range of possible utility levels in the decision problem should be bounded from below, and the discount factor between successive periods should be non-decreasing over time, a condition met by exponential, quasi-exponential and hyperbolic discounting.

Keywords: Game Theory; Time Preference; Hyperbolic Discounting; Repeated Decision Problems (search for similar items in EconPapers)
JEL-codes: C61 C72 C73 D90 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2002-04-16
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Uniqueness in infinitely repeated decision problems (2002)
Working Paper: Uniqueness in infinitely repeated decision problems (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0577

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