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http://hdl.handle.net/10419/56087
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| Title: | | Folk theorems for present-biased players  |
| Authors: | | BernergÄrd, Axel |
| Issue Date: | | 2011 |
| Series/Report no.: | | SSE/EFI Working Paper Series in Economics and Finance 736 |
| Abstract: | | The folk theorems for infinitely repeated games with discounting presume that the discount rate between two successive periods is constant. Following the literature on quasi-exponential or hyperbolic discounting, I model the repeated interaction between two or more decision makers in a way that allows present-biased discounting where the discount factor between two successive periods increases with the waiting time until the periods are reached. I generalize Fudenberg and Maskin's (1986) and Abreu, Dutta and Smith's (1994) folk theorems for repeated games with discounting so that they apply when discounting is present-biased. Patience is then represented either by the discount factor between the next and the current period or, alternatively, by the sum of the discount factors for all future periods. |
| Subjects: | | folk theorem present-biased discounting hyperbolic |
| JEL: | | C73 |
| Document Type: | | Working Paper |
| Appears in Collections: | | SSE/EFI Working Paper Series in Economics and Finance, EFI - The Economic Research Institute, Stockholm School of Economics
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