Valuating Payoff Streams under Unequal Discount Factors

Hannu Salonen and Hannu Vartiainen ()

No 16, Discussion Papers from Aboa Centre for Economics

Abstract: We study repeated prize allocation problem when the discount factors f the agents are not equal. It is shown that the feasible set of payoffs is not well behaved. In particular, it is not convex as it contains holes and caves. The Pareto frontier is everywhere discontinuous and there is an open subset of discount factors such that the feasible set is totally disconnected.

Keywords: payoffs; differentiated discount factor; repeated games (search for similar items in EconPapers)
JEL-codes: C60 C70 (search for similar items in EconPapers)
Pages: 15
Date: 2007-06
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Related works:
Journal Article: Valuating payoff streams under unequal discount factors (2008)
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