Journal of Economic Structures

, 1:5

Open Access This content is freely available online to anyone, anywhere at any time.

Nonmyopia and incentives in the piecewise linearized MDP procedures with variable step-sizes

  • Kimitoshi SatoAffiliated withHeat Island Institute InternationalTokyo Institute of Technology Email author 


The paper formulates a piecewise linearized version of the procedure developed by Sato (1983) and analyzes its properties. In so doing, Fujigaki’s (1981) private goods economy is extended to involve a public good; and the intertemporal game of Champsaur and Laroque is piecewise localized by dividing the time interval in their game and by using variable step-sizes to formalize the piecewise linearized procedure, called λMDP Procedure, that can possess similar desirable properties shared by continuous-time procedures. Under Nonmyopia assumption, each player’s best reply strategy at any discrete date is to reveal his/her anticipated marginal rate of substitution for a public good at the end of a current time interval of the λMDP Procedure.

JEL Classification: H41.


incentives nonmyopia piecewise linearized procedures public goods variable step-sizes