|Date: Wednesday, October 04, 2017
Location: 1360 EH East Hall (4:00 PM to 5:00 PM)
Title: Optimal Equilibrium for Time-Inconsistent Stopping Problems
Abstract: We study an infinite-horizon optimal stopping problem under non-exponential discounting. A new method, which we call the iterative approach, is developed to find subgame perfect Nash equilibriums. When the discount function induces decreasing impatience, we establish the existence of an equilibrium through fixed-point iterations. Moreover, we show that there exists a unique optimal equilibrium, which generates larger value than any other equilibrium does at all times. To the best of our knowledge, this is the first time a dominating subgame perfect Nash equilibrium is shown to exist in the literature of time-inconsistency.
Speaker: Zhou Zhou