Abstract
Suppose the policy problem can be described as a repeated game between two decision makers, and suppose that one of the two players make his strategy conditional on the other player’s strategy. This implies that one player decides first, whereas the other player decides only after having observed the first player’s strategy. The policy problem is therefore sequential. For example, private agents’ behaviour may be constrained by the existence of contracts, so that at each stage, private agents sign contracts first, and the policy maker decides its policy only after having observed the agents’ strategy.
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Carraro, C. (1990). Credibility, Reputation and the Indeterminacy of Macroeconomics. In: Artus, P., Barroux, Y. (eds) Monetary Policy. Advanced Studies in Theoretical and Applied Econometrics, vol 19. Springer, Dordrecht. https://doi.org/10.1007/978-94-015-7852-3_3
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DOI: https://doi.org/10.1007/978-94-015-7852-3_3
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