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

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  • Kimitoshi Sato

Abstract

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. Copyright Sato; licensee Springer 2012

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  • Kimitoshi Sato, 2012. "Nonmyopia and incentives in the piecewise linearized MDP procedures with variable step-sizes," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 1(1), pages 1-23, December.
    • Handle: RePEc:spr:jecstr:v:1:y:2012:i:1:p:1-23:10.1186/2193-2409-1-5
    DOI: 10.1186/2193-2409-1-5
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    Cited by:

    1. Kazuhiko Nishimura, 2013. "Quality Adjustment in Non-spanning Markets with Variety Aversion," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 2(1), pages 1-18, December.
    2. Kimitoshi Sato, 2016. "The MDP Procedure for public goods and local strategy proofness," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 5(1), pages 1-31, December.

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    More about this item

    Keywords

    incentives; nonmyopia; piecewise linearized procedures; public goods; variable step-sizes;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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