Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/56087
Authors: 
Bernergård, Axel
Year of Publication: 
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

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