Abstract

This paper analyses the time consistency of open-loop equilibria, in the cases of Nash and Stackelberg behaviour. We define a class of games where the strong time-consistency of the open-loop Nash equilibrium associates with the time consistency of the open-loop Stackelberg equilibrium. We label these games as ‘perfect uncontrollable’. We provide one example based on a model of oligopolistic competition in advertising efforts. We also present two oligopoly games where one property holds while the other does not, so that either (i) the open-loop Nash equilibrium is subgame perfect while the stackelberg one is time inconsistent, or (ii) the open-loop Nash and Stackelberg equilibria are only weakly time consistent.