Template-type: ReDif-Paper 1.0
Author-Name: Cingiz, K.
Author-workplace-name: Microeconomics & Public Economics
Author-Name: Flesch, J.
Author-workplace-name: Quantitative Economics
Author-Name: Herings, P.J.J.
Author-workplace-name: Microeconomics & Public Economics
Author-Name: Predtetchinski, A.
Author-workplace-name: Microeconomics & Public Economics
Title: Doing it now, later, or never
Abstract: We study centipede games played by an infinite sequence of players. Following the literature on time-inconsistent preferences, we distinguish two types of decision makers, naive and sophisticated, and the corresponding solution concepts, naïve ϵ-equilibrium and sophisticated ϵ-equilibrium. We show the existence of both naive and sophisticated ϵ-equilibria for each positive ϵ. Under the assumption that the payoff functions are upper semicontinuous, we furthermore show that there exist both naive and sophisticated 0-equilibria in pure strategies. We also compare the probability to stop of a naive versus a sophisticated decision maker and show that a sophisticated decision maker stops earlier.
Series: GSBE Research Memoranda
Creation-Date: 20150101
Number: 022
File-URL: https://cris.maastrichtuniversity.nl/ws/files/874367/guid-b870f657-e0de-4a99-9c11-01d8037931df-ASSET1.0.pdf
File-Format: application/pdf
File-Size: 488599
Handle: Repec:unm:umagsb:2015022
DOI: 10.26481/umagsb.2015022