Time Consistency in Games of Timing

Lambertini, Luca (1998) Time Consistency in Games of Timing. Bologna: Dipartimento di Scienze economiche DSE, p. 24. DOI 10.6092/unibo/amsacta/5006. In: Quaderni - Working Paper DSE (302). ISSN 2282-6483.
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Abstract

This paper tackles the issue of choosing roles in duopoly games. First, it is shown that the two necessary (and sufficient, if both satisfied) conditions for sequential play to emerge at equilibrium are that both leader and follower are at least weakly better off than under simultaneous play. Second, by means of a two-stage game of vertical differentiation, it is shown that if firms can commit to their respective timing decisions, there may exists a case where the leader is not necessarily better off than in the simultaneous equilibrium. Finally, in the absence of any commitment devices, it is proved that the timing choice can be time inconsistent if it is taken before firms proceed to play in both stages taking place in real time.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Lambertini, Luca
Keywords
extended game, sequential play, simultaneous play, time consistency, vertical differentiation
Subjects
ISSN
2282-6483
DOI
Deposit date
30 Mar 2016 09:21
Last modified
30 Mar 2016 09:21
URI

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