Games with Time Inconsistent Players

Download or read book Games with Time Inconsistent Players written by Yianis Sarafidis and published by . This book was released on 2007 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We embed time inconsistent agents (players) in non-cooperative games. To solve such games, we introduce two solution concepts, which we refer to as equilibrium and naive backwards induction. When all players are sophisticated time inconsistent, these solution concepts are equivalent and coincide with the standard notions of SPNE and backwards induction (in finite games of perfect information). When some players are naive time inconsistent, however, these solution concepts (may, and most likely will) lead to different predictions. We apply these solution concepts on two well-known economic applications, the alternating-offers bargaining game and the durable good monopoly, and we explore their relative strengths and weaknesses.