Games With Possibly Naive Hyperbolic Discounters

Marco Haan and Dominic Hauck

MPRA Paper from University Library of Munich, Germany

Abstract: We propose a solution concept for games that are played among hyperbolic discounters that are possibly naive about their own, or about their opponent's future time inconsistency. Our perception-perfect equilibrium essentially requires each player to take an action consistent with the subgame perfect equilibrium, given her perceptions concerning future types, and under the assumption that other present and future players have the same perceptions. Applications include a common pool problem and Rubinstein bargaining. When players are naive about their own time consistency and sophisticated about their opponent's, the common pool problem is exacerbated, and Rubinstein bargaining breaks down completely.

Keywords: Hyperbolic Discounting; naivety; bargaining (search for similar items in EconPapers)
JEL-codes: C72 C78 D03 D91 (search for similar items in EconPapers)
Date: 2014-08-15
New Economics Papers: this item is included in nep-evo, nep-gth and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:57960

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