Nonmyopia and incentives in the piecewise linearized MDP procedures with variable step-sizes
- Kimitoshi Sato
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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.
- Nonmyopia and incentives in the piecewise linearized MDP procedures with variable step-sizes
- Open Access
- Available under Open Access This content is freely available online to anyone, anywhere at any time.
Journal of Economic Structures
- Online Date
- July 2012
- Online ISSN
- Additional Links
- piecewise linearized procedures
- public goods
- variable step-sizes
- Kimitoshi Sato (1) (2)
- Author Affiliations
- 1. Heat Island Institute International, G-5, 4252 Nagatsuda-machi, Midori-ku, Yokohama-shi, 226-8502, Japan
- 2. Tokyo Institute of Technology, Tokyo, Japan